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Public Enforcement/Private Monitoring: Evaluating a New Approach to Regulating the Minimum Wage

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  • David Weil

Abstract

This paper examines compliance with federal minimum wage laws in the U.S. apparel industry and analyzes the impact of new methods of intervention designed to improve regulatory performance. Drawing on data from a randomized survey of apparel contractors, the author evaluates the impact of agreements between manufacturers and the government used to monitor contractor behavior as a means of improving compliance outcomes. Several non-regulatory variables predicted by theory to be important influences—the level of work skills, for example, and product market factors related to the elasticity of labor demand—are indeed found to be correlated with compliance. Nonetheless, stringent forms of contractor monitoring are associated with substantial reductions in violations of minimum wage standards. The results suggest that well-designed public/private monitoring efforts can lead to significant improvements in compliance with labor standards.

Suggested Citation

  • David Weil, 2005. "Public Enforcement/Private Monitoring: Evaluating a New Approach to Regulating the Minimum Wage," ILR Review, Cornell University, ILR School, vol. 58(2), pages 238-257, January.
  • Handle: RePEc:sae:ilrrev:v:58:y:2005:i:2:p:238-257
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    Cited by:

    1. Linxiang Ye & TH Gindling & Shi Li, 2015. "Compliance with legal minimum wages and overtime pay regulations in China," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-35, December.
    2. Ronconi, Lucas & Zarazaga S.J., Rodrigo, 2015. "Labor Exclusion and the Erosion of Citizenship Responsibilities," World Development, Elsevier, vol. 74(C), pages 453-461.
    3. Dinkelman, Taryn & Ranchhod, Vimal, 2012. "Evidence on the impact of minimum wage laws in an informal sector: Domestic workers in South Africa," Journal of Development Economics, Elsevier, vol. 99(1), pages 27-45.
    4. repec:ilo:ilowps:487848 is not listed on IDEAS
    5. David WEIL, 2008. "A strategic approach to labour inspection," International Labour Review, International Labour Organization, vol. 147(4), pages 349-375, December.
    6. Roberto PIRES, 2008. "Promoting sustainable compliance: Styles of labour inspection and compliance outcomes in Brazil," International Labour Review, International Labour Organization, vol. 147(2-3), pages 199-229, June.
    7. Caliendo, Marco & Schröder, Carsten & Wittbrodt, Linda, 2018. "The Causal Effects of the Minimum Wage Introduction in Germany: An Overview," IZA Discussion Papers 12043, Institute of Labor Economics (IZA).
    8. Richard M. Locke & Ben A. Rissing & Timea Pal, 2013. "Across Boundaries: The Global Challenges Facing Workers and Employment Research 50th Anniversary Special Issue," British Journal of Industrial Relations, London School of Economics, vol. 51(3), pages 519-552, September.
    9. Feuerstein, Patrick & Herrigel, Gary, 2017. "The limits of global labor governance and an emerging perspective," economic sociology_the european electronic newsletter, Max Planck Institute for the Study of Societies, vol. 18(2), pages 6-15.
    10. Annette BERNHARDT & Siobhán McGRATH & James DeFILIPPIS, 2008. "The state of worker protections in the United States: Unregulated work in New York City," International Labour Review, International Labour Organization, vol. 147(2-3), pages 135-162, June.
    11. Berliner, Daniel & Greenleaf, Anne & Lake, Milli & Noveck, Jennifer, 2015. "Building Capacity, Building Rights? State Capacity and Labor Rights in Developing Countries," World Development, Elsevier, vol. 72(C), pages 127-139.
    12. Clemens, Jeffrey & Strain, Michael R., 2019. "Understanding "Wage Theft": Evasion and Avoidance Responses to Minimum Wage Increases," IZA Discussion Papers 12167, Institute of Labor Economics (IZA).
    13. Ronconi, Lucas & Zarazaga S.J., Rodrigo, 2015. "Labor Exclusion and the Erosion of Citizenship Responsibilities," World Development, Elsevier, vol. 74(C), pages 453-461.

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