IDEAS home Printed from https://ideas.repec.org/a/ucp/jlabec/v19y2001i3p596-603.html
   My bibliography  Save this article

Minimum Wage Noncompliance and the Employment Decision

Author

Listed:
  • Yaniv, Gideon

Abstract

The employment effects of minimum wage noncompliance have been the focus of several theoretical contributions to the minimum wage literature, the dominating conclusion being that the noncomplying employer, while reducing employment below the free-market level, will still employ more labor than he would if complying. Allowing, however, for partial compliance, this study applies a portfolio-choice approach to the employer's problem, concluding surprisingly that the minimum wage law may give rise to a full-compliance employment effect even if it is partially evaded. This result is further shown to hold with regard to labor market laws in general. Copyright 2001 by University of Chicago Press.

Suggested Citation

  • Yaniv, Gideon, 2001. "Minimum Wage Noncompliance and the Employment Decision," Journal of Labor Economics, University of Chicago Press, vol. 19(3), pages 596-603, July.
    • Handle: RePEc:ucp:jlabec:v:19:y:2001:i:3:p:596-603
    DOI: 10.1086/322074
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1086/322074
    File Function: full text
    Download Restriction: Access to full text is restricted to subscribers. See http://www.journals.uchicago.edu/JOLE for details.
    File URL: https://libkey.io/10.1086/322074?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Yang-Ming Chang, 1992. "Noncompliance Behavior of Risk-Averse Firms Under the Minimum Wage Law," Public Finance Review, , vol. 20(3), pages 390-401, July.
    2. Yaniv, Gideon, 1994. "Complaining about noncompliance with the minimum wage law," International Review of Law and Economics, Elsevier, vol. 14(3), pages 351-362, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jonathan Meer & Jeremy West, 2016. "Effects of the Minimum Wage on Employment Dynamics," Journal of Human Resources, University of Wisconsin Press, vol. 51(2), pages 500-522.
    2. repec:ebl:ecbull:v:10:y:2004:i:9:p:1-7 is not listed on IDEAS
    3. Simplice Anutechia Asongu & Mohamed Jellal, 2014. "A Theory of Compliance with Minimum Wage Law," AAYE Policy Research Working Paper Series 14_020, Association of African Young Economists, revised Nov 2014.
    4. Andrea Garnero & Claudio Lucifora, 2022. "Turning a ‘Blind Eye’? Compliance with Minimum Wage Standards and Employment," Economica, London School of Economics and Political Science, vol. 89(356), pages 884-907, October.
    5. Andrea Garnero & Claudio Lucifora, 2020. "Turning A Blind Eye? Compliance To Minimum Wages And Employment," DISCE - Working Papers del Dipartimento di Economia e Finanza def085, Università Cattolica del Sacro Cuore, Dipartimenti e Istituti di Scienze Economiche (DISCE).
    6. Gil S. Epstein & Odelia Heizler (Cohen), 2008. "Illegal migration, enforcement, and minimum wage," Research in Labor Economics, in: Work, Earnings and Other Aspects of the Employment Relation, pages 197-224, Emerald Group Publishing Limited.
    7. Danziger, Leif, 2009. "Noncompliance and the effects of the minimum wage on hours and welfare in competitive labor markets," Labour Economics, Elsevier, vol. 16(6), pages 625-630, December.
    8. Mansoor, Kashif & O'Neill, Donal, 2021. "Minimum wage compliance and household welfare: An analysis of over 1500 minimum wages in India," World Development, Elsevier, vol. 147(C).
    9. Kanbur, Ravi, 2009. "Conceptualizing Informality: Regulation and Enforcement," Working Papers 48926, Cornell University, Department of Applied Economics and Management.
    10. Devereux, Kevin & Studnicka, Zuzanna, 2024. "Non-monotonic employment effects by market structure and minimum wage level," CLEF Working Paper Series 66, Canadian Labour Economics Forum (CLEF), University of Waterloo.
    11. Andrés Ham, 2015. "Minimum wage violations in Honduras," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-19, December.
    12. ArnabK. Basu & NancyH. Chau & Ravi Kanbur, 2010. "Turning a Blind Eye: Costly Enforcement, Credible Commitment and Minimum Wage Laws," Economic Journal, Royal Economic Society, vol. 120(543), pages 244-269, March.
    13. Goerke, Laszlo & Pannenberg, Markus, 2023. "Minimum Wage Non-compliance: The Role of Co-determination," IZA Discussion Papers 16621, Institute of Labor Economics (IZA).
    14. repec:ebl:ecbull:v:10:y:2007:i:4:p:1-7 is not listed on IDEAS
    15. Clemens, Jeffrey & Strain, Michael R., 2022. "Understanding “Wage Theft”: Evasion and avoidance responses to minimum wage increases," Labour Economics, Elsevier, vol. 79(C).
    16. Danziger, Leif, 2010. "Endogenous monopsony and the perverse effect of the minimum wage in small firms," Labour Economics, Elsevier, vol. 17(1), pages 224-229, January.
    17. Mario Bossler & Ying Liang & Thorsten Schank, 2024. "The Devil is in the Details: Heterogeneous Effects of the German Minimum Wage on Working Hours and Minijobs," Papers 2403.17206, arXiv.org, revised May 2024.
    18. Jellal, Mohamed, 2012. "A theory of compliance with minimum wage legislation," MPRA Paper 39499, University Library of Munich, Germany.
    19. Badaoui, Eliane & Walsh, Frank, 2022. "Productivity, non-compliance and the minimum wage," Journal of Development Economics, Elsevier, vol. 155(C).
    20. Chang, Yang-Ming & Huang, Biing-Wen & Chen, Yun-Ju, 2012. "Labor supply, income, and welfare of the farm household," Labour Economics, Elsevier, vol. 19(3), pages 427-437.
    21. repec:ebl:ecbull:v:10:y:2005:i:4:p:1-10 is not listed on IDEAS
    22. Haroon Bhorat & Ravi Kanbur & Benjamin Stanwix, 2015. "Partial minimum wage compliance," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-20, December.
    23. Yang-Ming Chang & Bhavneet Walia, 2007. "Wage discrimination and partial compliance with the minimum wage law," Economics Bulletin, AccessEcon, vol. 10(4), pages 1-7.
    24. Schumann, Mathias, 2017. "The effects of minimum wages on firm-financed apprenticeship training," Labour Economics, Elsevier, vol. 47(C), pages 163-181.
    25. Yaniv, Gideon, 2006. "On the employment effect of noncompliance with the minimum wage law," International Review of Law and Economics, Elsevier, vol. 26(4), pages 557-564, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:ebl:ecbull:v:10:y:2007:i:4:p:1-7 is not listed on IDEAS
    2. Yang-Ming Chang & Bhavneet Walia, 2007. "Wage discrimination and partial compliance with the minimum wage law," Economics Bulletin, AccessEcon, vol. 10(4), pages 1-7.
    3. Yaniv, Gideon, 2006. "On the employment effect of noncompliance with the minimum wage law," International Review of Law and Economics, Elsevier, vol. 26(4), pages 557-564, December.
    4. repec:ebl:ecbull:v:10:y:2004:i:9:p:1-7 is not listed on IDEAS
    5. Dinkelman, Taryn & Ranchhod, Vimal, 2012. "Evidence on the impact of minimum wage laws in an informal sector: Domestic workers in South Africa," Journal of Development Economics, Elsevier, vol. 99(1), pages 27-45.
    6. Yaniv, Gideon, 1998. "Phobic disorder, psychotherapy, and risk-taking: an economic perspective," Journal of Health Economics, Elsevier, vol. 17(2), pages 229-243, April.
    7. Goerke, Laszlo & Pannenberg, Markus, 2023. "Minimum Wage Non-compliance: The Role of Co-determination," IZA Discussion Papers 16621, Institute of Labor Economics (IZA).
    8. Simplice A. Asongu & Mohamed Jellal, 2014. "A Theory of Compliance with Minimum Wage Law," Research Africa Network Working Papers 14/008, Research Africa Network (RAN).
    9. Badaoui, Eliane & Walsh, Frank, 2022. "Productivity, non-compliance and the minimum wage," Journal of Development Economics, Elsevier, vol. 155(C).
    10. Stephen Clibborn & Sally Hanna‐Osborne, 2023. "The employer perspective on wage law non‐compliance: State of the field and a framework for new understanding," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 62(4), pages 411-438, October.
    11. David WEIL, 2008. "A strategic approach to labour inspection," International Labour Review, International Labour Organization, vol. 147(4), pages 349-375, December.
    12. Clemens, Jeffrey & Strain, Michael R., 2022. "Understanding “Wage Theft”: Evasion and avoidance responses to minimum wage increases," Labour Economics, Elsevier, vol. 79(C).
    13. Karnit Flug & Nitsa Kasir (Kaliner, 2003. "Poverty And Employment, And The Gulf Between Them," Israel Economic Review, Bank of Israel, vol. 1(1), pages 55-80.
    14. repec:ebl:ecbull:v:10:y:2005:i:4:p:1-10 is not listed on IDEAS
    15. גדעון יניב, 1995. "הפרעה פובית, הוצאות טיפול והימנעות מסיכון: הסתכלות כלכלית (באנגלית)," Working Papers 337, National Insurance Institute of Israel.
    16. Chang, Yang-Ming & Huang, Biing-Wen & Chen, Yun-Ju, 2012. "Labor supply, income, and welfare of the farm household," Labour Economics, Elsevier, vol. 19(3), pages 427-437.
    17. Nicole Coomer & Walter Wessels, 2013. "The Effect of the Minimum Wage on Covered Teenage Employment," Journal of Labor Research, Springer, vol. 34(3), pages 253-280, September.
    18. Jellal, Mohamed, 2012. "A theory of compliance with minimum wage legislation," MPRA Paper 39499, University Library of Munich, Germany.
    19. גדעון יניב, 1999. "אי-ציות לחוק שכר מינימום והיקף ההעסקה האופטימאלי (באנגלית)," Working Papers 356, National Insurance Institute of Israel.
    20. Jellal, Mohamed, 2009. "Entrepreneurship and Compliance With Minimum Wage Law," MPRA Paper 17156, University Library of Munich, Germany.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucp:jlabec:v:19:y:2001:i:3:p:596-603. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Journals Division (email available below). General contact details of provider: https://www.journals.uchicago.edu/JOLE .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.