Arbeitspapier
Minimum Wage and Tax Evasion: Theory and Evidence
The paper investigates the role of the minimum wage in a competi- tive economy in which there is underreporting of earnings by employed labour. The minimum wage induces higher compliance by some low- productivity workers and transforms a nominally neutral .scal system into a regressive one. A spike in the wage distribution at the mini- mum wage level appears and a positive correlation between the size of the spike and the size of the informal economy is predicted and documented using cross-country data for Europe. A further result is that employees whose officially declared earnings appear to be boosted by a minimum wage hike actually experience a decline in their true income. This prediction finds support in an empirical test using the massive increase in the minimum wage that took place in Hungary in 2001 as a quasi-natural experiment.
- ISBN
-
978-963-9588-93-6
- Sprache
-
Englisch
- Erschienen in
-
Series: IEHAS Discussion Papers ; No. MT-DP - 2007/1
- Klassifikation
-
Wirtschaft
Wages, Compensation, and Labor Costs: Public Policy
Tax Evasion and Avoidance
Fiscal Policies and Behavior of Economic Agents: Firm
- Thema
-
Minimum Wage
Tax Evasion
Wage Distribution
Hungary
Mindestlohn
Steuervermeidung
Schattenwirtschaft
Lohnstruktur
Ungarn
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Tonin, Mirco
- Ereignis
-
Veröffentlichung
- (wer)
-
Hungarian Academy of Sciences, Institute of Economics
- (wo)
-
Budapest
- (wann)
-
2007
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Tonin, Mirco
- Hungarian Academy of Sciences, Institute of Economics
Entstanden
- 2007
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