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Comment by Tarang

It comes from academic material, typical neoclassic economics textbooks teach this so I assume its from The Wealth of Nations. By increasing the minimum wage it locks out a portion of employees from being employed where the marginal product of labour is less than the minimum wage.

Because of this there are actually tonnes of papers studying its effects:

[1] http://www.nber.org/papers/w0846.pdf (one such paper)

parent Tarang 11 years ago

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