Minimum Wage Violations in a Dual Labor Market with Multiple Floors

Posted: 1 Feb 2015

See all articles by Andrés Ham

Andrés Ham

Universidad de los Andes, Colombia - School of Government

Date Written: January 29, 2015

Abstract

Minimum wage compliance is studied by counting how many workers are paid below this floor. While useful, it is unable to identify the degree of underpayment. Recently, a family of violation indices has overcome this issue. I estimate these measures for Honduras, a dual labor market with multiple wage floors. First, I quantify industry-level violations by location and coverage status. Then, I estimate whether higher minimum wages affect non-compliance. The results reveal substantial variation in violations and that raising minimum wages leads to more underpaid workers but does not affect the degree by which they are underpaid.

Keywords: minimum wages, compliance, incidence and depth of violations, dual labor markets, Honduras

JEL Classification: J38, J42, O54

Suggested Citation

Ham, Andrés, Minimum Wage Violations in a Dual Labor Market with Multiple Floors (January 29, 2015). Available at SSRN: https://ssrn.com/abstract=2557635 or http://dx.doi.org/10.2139/ssrn.2557635

Andrés Ham (Contact Author)

Universidad de los Andes, Colombia - School of Government ( email )

Cra 1. No. 19 - 27. Bloque Aulas Tercer piso
Bogotá D.C.
Colombia

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