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Minimum wage violations in Honduras

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  • Andrés Ham

Abstract

This article studies minimum wage non-compliance in Honduras, a dual labor market with high wage floors that are weakly enforced. However, rather than just counting how many workers earn sub-minimum wages, it also estimates violation indices that measure compliance at the intensive margin. I first explore cross-sectional heterogeneity in violations using household survey data. Then, I quantify compliance adjustments to minimum wage hikes by comparing indices before and after a large unexpected increase. Results show substantial differences in non-compliance across industries, location, and coverage status. Violations worsen with rising minima, but less in in more compliant sectors. JEL classification codes: J38, J42, O54 Copyright Ham. 2015

Suggested Citation

  • 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.
    • Handle: RePEc:spr:izaldv:v:4:y:2015:i:1:p:1-19:10.1186/s40175-015-0045-3
    DOI: 10.1186/s40175-015-0045-3
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    Cited by:

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    2. Ravi KANBUR & Lucas RONCONI, 2018. "Enforcement matters: The effective regulation of labour," International Labour Review, International Labour Organization, vol. 157(3), pages 331-356, September.
    3. Soundararajan, Vidhya, 2019. "Heterogeneous effects of imperfectly enforced minimum wages in low-wage labor markets," Journal of Development Economics, Elsevier, vol. 140(C), pages 355-374.
    4. Dewey, Matías & Ronconi, Lucas, 2023. "Weberian Civil Service and Labor Enforcement," IZA Discussion Papers 16295, Institute of Labor Economics (IZA).
    5. Ham, Andrés, 2018. "The Consequences of Legal Minimum Wages in Honduras," World Development, Elsevier, vol. 102(C), pages 135-157.
    6. Campos-Vazquez Raymundo M. & Delgado Victor & Rodas Alexis, 2020. "The effects of a place-based tax cut and minimum wage increase on labor market outcomes," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 10(1), pages 1-24, March.
    7. 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).
    8. Koch, Andreas & Kirchmann, Andrea & Reiner, Marcel & Scheu, Tobias & Zühlke, Anne & Bonin, Holger, 2020. "Verhaltensmuster von Betrieben und Beschäftigten im Kontext des gesetzlichen Mindestlohns," IZA Research Reports 97, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Minimum wages; Compliance; Violations; Dual labor markets; Honduras;
    All these keywords.

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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