%0 Report
        %A Danziger, Eliav
%A Danziger, Leif
        %T A Pareto-Improving Minimum Wage
        %D 2014
        %8 2014 Apr
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 8123
        %U https://www.iza.org/publications/dp8123
        %X This paper shows that a graduated minimum wage, in contrast to a constant minimum wage, can provide a strict Pareto improvement over what can be achieved with an optimal income tax. The reason is that a graduated minimum wage requires high-productivity workers to work more to earn the same income as low-productivity workers, which makes it more difficult for the former to mimic the latter. In effect, a graduated minimum wage allows the low-productivity workers to benefit from second-degree price discrimination which increases their income.
        %K Pareto improvement
%K graduated minimum wage