This paper examines the impact of unions on unemployment and wages in a dynamic equilibrium search model. Unions impose a minimum wage on employers and ration jobs to ensure that their most senior members are employed. A minimum wage policy is optimal for a utilitarian union that cares equally about its employed and unemployed members. The combination of a minimum wage and rationing by seniorit...

We examine the impacts of minimum wage on employment using minimum-wage hike induced by introduction indexation local to cost living. The revision Minimum Wage Act in 2007 Japan essentially required government set indexed living, with a five-year moratorium period. subsequently increased areas where living was high relative wage. Allowing for different trends labor-market outcomes across region...