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The government is seeking your advice on whether or not to increase the minimum wage. They are looking for information regarding the possible consequences of such action. They specifically request information on the following,

  1. What does economic theory have to say about the possible employment effects associated with a minimum wage increase? What does the existing evidence say about the possible employment effects?
  2. Is the minimum wage a useful policy tool for combatting household poverty? Is it likely to impact wage inequality?

In addition, the government are investigating the idea of a Universal Basic Income (UBI). They know very little about UBI and have asked for your advice. They would like to know what exactly a UBI entails and what are the possible impacts of implementing a UBI?

You are required to write a report to help inform their policy decisions.

Notes: The purpose of this exercise is to assess your ability to explain an important economic concept in a clear and concise way. The challenge is to construct your report so that you convey all of the relevant information within the allocated word count.

You may use graphs or tables in your report which do not count towards the word count.

You are free to structure your report in whatever way you feel is most appropriate. The report is aimed at “the government”. You can keep the report general if you wish, without specifically referencing any particular country. On the other hand, if you prefer to specifically reference a particular country, that is also fine.

You must include references to any literature or journal articles that you cite in the report. The list of references will not count towards the word count.


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