A Note on Measuring the Depth of Minimum Wage Violation

6 Pages Posted: 9 May 2013

See all articles by H. Bhorat

H. Bhorat

University of Cape Town (UCT) - Development Policy Research Unit

Ravi Kanbur

Cornell University; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Natasha Mayet

University of Cape Town (UCT) - Development Policy Research Unit

Date Written: June 2013

Abstract

In the empirical literature on minimum wage enforcement, the standard approach is to measure the number of violations, not their depth. In this paper we present a family of violation indices that, by analogy with poverty indices, can emphasize the depth of violation to different degrees. The standard measure is a special case of this family of indices, but other members of the family highlight the depth of violation. We present an application to South Africa to show that the depth of violation matters, and is not captured by the standard measure in actual situations.

JEL Classification: J38, J88, O55

Suggested Citation

Bhorat, Haroon I. and Kanbur, Ravi and Mayet, Natasha, A Note on Measuring the Depth of Minimum Wage Violation (June 2013). LABOUR, Vol. 27, Issue 2, pp. 192-197, 2013. Available at SSRN: https://ssrn.com/abstract=2262648 or http://dx.doi.org/10.1111/labr.12010

Haroon I. Bhorat (Contact Author)

University of Cape Town (UCT) - Development Policy Research Unit ( email )

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Ravi Kanbur

Cornell University ( email )

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Centre for Economic Policy Research (CEPR)

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United Kingdom

IZA Institute of Labor Economics

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Bonn, D-53072
Germany

Natasha Mayet

University of Cape Town (UCT) - Development Policy Research Unit ( email )

Private Bag
Rondesbosch, 7700
South Africa

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