Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/263374 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15158
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
In analyses of minimum wages, positive "ripple effects" and subminimum wages are difficult to distinguish from measurement error. Indeed, prior work posits that a simple, symmetric measurement process may underlie both phenomena in Current Population Survey data for the full working age population. We show that the population-wide symmetry between spillovers and subminimum wage payment is illusory in that spillovers accrue to older individuals while underpayment accrues to the young. Symmetric measurement error cannot explain this heterogeneity, which increases the likelihood that both spillovers and subminimum-wage payment are real effects of minimum wage increases rather than artifacts of measurement error.
Subjects: 
minimum wage
subminimum wage
noncompliance
JEL: 
J08
J38
K42
Document Type: 
Working Paper

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