Project description
Inequalities in minimum wages
Policymakers have long grappled with the task of developing measures that can simultaneously improve the distribution of economic resources but at the same time, foster economic growth. The EU-funded MW_INEQ aims to study the effectiveness of a particular prominent instrument to achieve this goal - the minimum wage. By addressing this, the project will provide for greater understanding of the roots of inequality and for unbundling the structure of low-wage labour markets. The project will achieve this by exploiting a combination of high-quality data, unique policy changes and richer models that explicitly consider the role of firms, their wage setting power, and the networks they are operating in.
Objective
Over the last two decades, wage and income inequality have increased sharply in most developed countries which is causing ever greater concern in the economic and political debate. A central challenge for policymakers is to develop measures that can simultaneously improve the distribution of economic resources and also foster economic growth. In our proposed research, we will study the effectiveness of a particular prominent instrument to achieve this goal - the minimum wage. First, we will provide a comprehensive assessment of how minimum wages affect the allocation of resources. We will examine whether minimum wages improve the efficiency of worker-firm sorting by reallocating workers to more efficient firms, how an increase in mandated wage floors ripples through the wage distribution and affects job flows among firms, and how the policy affects the assortativity of firm-to-firm relationships. Second, we will look at the impact of the minimum wage on different groups in the population by studying its effect on the allocation of jobs among immigrant and native workers. Recent research suggests that there is a link between inequality and intergenerational mobility but whether public policies that alleviate inequality can also contribute to higher intergenerational mobility remains an open question. To fill this gap in the literature, we will study the effect of minimum wages on maternal labour supply, on child development and eventually on intergenerational mobility. The comprehensive agenda outlined in this proposal therefore addresses a more general call for understanding the roots of inequality and for unbundling the structure of low-wage labour markets. We will achieve this by exploiting a combination of high-quality data, unique policy changes and richer models that explicitly consider the role of firms, their wage setting power, and the networks they are operating in.
Keywords
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Project’s keywords as indicated by the project coordinator. Not to be confused with the EuroSciVoc taxonomy (Fields of science)
Programme(s)
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
Multi-annual funding programmes that define the EU’s priorities for research and innovation.
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H2020-EU.1.1. - EXCELLENT SCIENCE - European Research Council (ERC)
MAIN PROGRAMME
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Topic(s)
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Calls for proposals are divided into topics. A topic defines a specific subject or area for which applicants can submit proposals. The description of a topic comprises its specific scope and the expected impact of the funded project.
Funding Scheme
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
Funding scheme (or “Type of Action”) inside a programme with common features. It specifies: the scope of what is funded; the reimbursement rate; specific evaluation criteria to qualify for funding; and the use of simplified forms of costs like lump sums.
ERC-STG - Starting Grant
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Call for proposal
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
Procedure for inviting applicants to submit project proposals, with the aim of receiving EU funding.
(opens in new window) ERC-2020-STG
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Net EU financial contribution. The sum of money that the participant receives, deducted by the EU contribution to its linked third party. It considers the distribution of the EU financial contribution between direct beneficiaries of the project and other types of participants, like third-party participants.
WC1E 6BT LONDON
United Kingdom
The total costs incurred by this organisation to participate in the project, including direct and indirect costs. This amount is a subset of the overall project budget.