The Macroeconomics of the Social Chapter: Minimum Wages, Human Capital and Labour Productivity

29 Pages Posted: 5 Nov 2006

See all articles by Saziye Gazioglu

Saziye Gazioglu

Robert Gordon University - Aberdeen Business School

W. David McCausland

University of Aberdeen - Business School

Date Written: January 2003

Abstract

This paper integrates trade and macro theory to provide a two-country, multi-product framework, including debt servicing and profit repatriation in the current account, and foreign money, financial assets and shares in the capital account. We investigate the effects of minimum wage legislation on the domestic tradeables and inward foreign investment sectors. Our findings show that there are asymmetrical effects on international debt and competitiveness. Thus policy makers must have a more detailed knowledge of the sectoral structure of the country they are concerned with in order to make informed decisions as to the merits of minimum wage legislation.

Keywords: wages, productivity, international debt, competitiveness

JEL Classification: F21, F30, F41, J31

Suggested Citation

Gazioglu, Saziye and McCausland, W. David, The Macroeconomics of the Social Chapter: Minimum Wages, Human Capital and Labour Productivity (January 2003). Available at SSRN: https://ssrn.com/abstract=942308 or http://dx.doi.org/10.2139/ssrn.942308

Saziye Gazioglu

Robert Gordon University - Aberdeen Business School ( email )

Garthdee Road
Aberdeen AB10 7QE
United Kingdom

W. David McCausland (Contact Author)

University of Aberdeen - Business School ( email )

Edward Wright Building
Dunbar Street
Old Aberdeen AB24 3QY, Scotland AB24 3QY
United Kingdom

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