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Library of Economics | Optimal Minimum Wage?
David Lee of Princeton University and Emmanual Saez of University of California, Berkeley have an article in the Journal of Public Economics titled "Optimum Minimum Wage Policy in Competitive Labor Markets." It has two strange results, one that I understand and that depends crucially on a strong assumption that they don't even attempt to justify and the other that I don't understand unless the concept of "Pareto improvement" has changed dramatically.
