Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/55132
Authors: 
Tonin, Mirco
Year of Publication: 
2011
Series/Report no.: 
Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5942
Abstract: 
This paper documents a positive correlation within European labour markets between the proportion of full-time employees with earnings on the minimum wage and the extent of underreporting of earnings in the economy. Using a simple model of a competitive labour market, I show how this correlation can emerge as a result of the common dependence of both quantities on the strength of enforcement of fiscal regulation. This suggests that a high spike in the wage distribution at the minimum wage level is, in some contexts, an issue of fiscal enforcement, more than a labour market issue.
Subjects: 
minimum wage
spike
underreporting
lighthouse effect
JEL: 
J38
H26
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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