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Minimum Wages, Minimum Labour Costs and the Tax Treatment of Low-Wage Employment

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  • Herwig Immervoll

Abstract

International comparisons of minimum-wage levels have largely focused on the gross value of minimum wages, ignoring the effects of taxation on both labour costs and the net income of employees. This paper presents estimates of the tax burdens facing minimum-wage workers. These are used as a basis for cross-country comparisons of the net earnings of these workers as well as the cost of employing them. In addition, results show the evolution of net incomes and labour costs during the 2000-2005 period and the relative importance of minimum-wage adjustments and... Des comparaisons internationales en matière de salaire minimum ont examiné de près surtout la valeur brute du salaire minimum, sans tenir compte de l’incidence des impositions sur les coûts du travail et sur le revenu net des employés. Ce document présente des estimations de la pression fiscale qui s’exerce sur les travailleurs percevant le salaire minimum. Elles sont utilisées comme base pour effectuer des comparaisons entre pays des gains nets de ces travailleurs ainsi que du coût de leur embauche. De plus, les résultats montrent l’évolution des revenus nets et...

Suggested Citation

  • Herwig Immervoll, 2007. "Minimum Wages, Minimum Labour Costs and the Tax Treatment of Low-Wage Employment," OECD Social, Employment and Migration Working Papers 46, OECD Publishing.
    • Handle: RePEc:oec:elsaab:46-en
    DOI: 10.1787/337686556262
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    References listed on IDEAS

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    1. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," Working Papers 060708, University of California-Irvine, Department of Economics, revised Jan 2007.
    2. Juan Dolado & Francis Kramarz & Steven Machin & Alan Manning & David Margolis & Coen Teulings, 1996. "The Economic Impact of Minimum Wages in Europe," Post-Print halshs-00353896, HAL.
    3. Stephen Machin & Alan Manning, 1992. "Minimum Wages," CEP Discussion Papers dp0080, Centre for Economic Performance, LSE.
    4. Kertesi, Gabor & Köllő, János, 2003. "Fighting “Low Equilibria” by Doubling the Minimum Wage? Hungary’s Experiment," IZA Discussion Papers 970, Institute of Labor Economics (IZA).
    5. Armin Falk & Ernst Fehr & Christian Zehnder, "undated". "The Behavioral Effects of Minimum Wages," IEW - Working Papers 247, Institute for Empirical Research in Economics - University of Zurich.
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    More about this item

    JEL classification:

    • D3 - Microeconomics - - Distribution
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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