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Compliance with minimum wage laws in developing countries

Author

Listed:
  • Haroon Bhorat

    (University of Cape Town, South Africa, IZA, Germany, and Brookings Institution, USA)

Abstract

The level of compliance with minimum wage laws often depends on factors specific to each labor market. In most developing countries, a substantial share of workers still earns less than the legal minimum. Enforcement has not kept up with growth in regulations to protect workers from low wages and poor working conditions. Several institutional structures shape enforcement, including the role of labor inspectors and approaches to compliance, and these and other variables can be analyzed to explore their effects on the level of minimum wage violations.

Suggested Citation

  • Haroon Bhorat, 2014. "Compliance with minimum wage laws in developing countries," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-80, August.
    • Handle: RePEc:iza:izawol:journl:y:2014:n:80
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    References listed on IDEAS

    as
    1. Haroon BHORAT & Ravi KANBUR & Natasha MAYET, 2012. "Minimum wage violation in South Africa," International Labour Review, International Labour Organization, vol. 151(3), pages 277-287, September.
    2. Ravi KANBUR & Lucas RONCONI & Leigh WEDENOJA, 2013. "Labour law violations in Chile," International Labour Review, International Labour Organization, vol. 152(3-4), pages 431-444, December.
    3. Haroon Bhorat & Ravi Kanbur & Natasha Mayet, 2013. "The impact of sectoral minimum wage laws on employment, wages, and hours of work in South Africa," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-27, December.
    4. William Maloney & Jairo Mendez, 2004. "Measuring the Impact of Minimum Wages. Evidence from Latin America," NBER Chapters, in: Law and Employment: Lessons from Latin America and the Caribbean, pages 109-130, National Bureau of Economic Research, Inc.
    5. Michael J. PIORE & Andrew SCHRANK, 2008. "Toward managed flexibility: The revival of labour inspection in the Latin world," International Labour Review, International Labour Organization, vol. 147(1), pages 1-23, March.
    6. Lemos, Sara, 2009. "Minimum wage effects in a developing country," Labour Economics, Elsevier, vol. 16(2), pages 224-237, April.
    7. Haroon Bhorat & Ravi Kanbur & Benjamin Stanwix, 2014. "Estimating the Impact of Minimum Wages on Employment, Wages, and Non-Wage Benefits: The Case of Agriculture in South Africa," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(5), pages 1402-1419.
    8. Gindling, T. H. & Mossaad, Nadwa & Trejos, Juan Diego, 2014. "The Consequences of Increased Enforcement of Legal Minimum Wages in a Developing Country: An Evaluation of the Impact of the Campaña Nacional de Salarios Mínimos in Costa Rica," IZA Discussion Papers 8253, Institute of Labor Economics (IZA).
    9. Haroon Bhorat & Ravi Kanbur & Natasha Mayet, 2013. "A Note on Measuring the Depth of Minimum Wage Violation," LABOUR, CEIS, vol. 27(2), pages 192-197, June.
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    Cited by:

    1. Strobl, Eric & Walsh, Frank, 2016. "Monopsony, minimum wages and migration," Labour Economics, Elsevier, vol. 42(C), pages 221-237.
    2. Karolina GORAUS‐TAŃSKA & Piotr LEWANDOWSKI, 2019. "Minimum wage violation in central and eastern Europe," International Labour Review, International Labour Organization, vol. 158(2), pages 297-336, June.
    3. Majid, Muhammad Farhan & Mendoza Rodríguez, José M. & Harper, Sam & Frank, John & Nandi, Arijit, 2016. "Do minimum wages improve early life health? Evidence from developing countries," Social Science & Medicine, Elsevier, vol. 158(C), pages 105-113.
    4. Robertson, Raymond & Kokas, Deeksha & Cardozo Medeiros, Diego & Lopez-Acevedo, Gladys, 2022. "Mending the Gap: Apparel Export Prices and the Gender Wage Gap in Bangladesh," IZA Discussion Papers 15411, Institute of Labor Economics (IZA).
    5. Luis E. Arango & Luz A. Flórez, 2017. "Informalidad laboral y elementos para un salario mínimo diferencial por regiones en Colombia," Borradores de Economia 1023, Banco de la Republica de Colombia.

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    More about this item

    Keywords

    legislated minimum wages; developing countries; index of violation; enforcement; compliance; active labor market policies;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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