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A Note On Measuring The Depth Of Minimum Wage Violation

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  • Bhorat, Haroon
  • Kanbur, Ravi
  • Mayet, Natasha

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 which, 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.

Suggested Citation

  • Bhorat, Haroon & Kanbur, Ravi & Mayet, Natasha, 2011. "A Note On Measuring The Depth Of Minimum Wage Violation," Working Papers 126533, Cornell University, Department of Applied Economics and Management.
  • Handle: RePEc:ags:cudawp:126533
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    File URL: http://purl.umn.edu/126533
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    References listed on IDEAS

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    1. William Maloney & Jairo Mendez, 2004. "Measuring the Impact of Minimum Wages. Evidence from Latin America," NBER Chapters,in: Law and Employment: Lessons from Latin America and the Caribbean, pages 109-130 National Bureau of Economic Research, Inc.
    2. Lucas Ronconi, 2010. "Enforcement and Compliance with Labor Regulations in Argentina," ILR Review, Cornell University, ILR School, vol. 63(4), pages 719-736, July.
    3. William Maloney & Daniel Lederman & Luis Servén, 2005. "Lessons from NAFTA: For Latin America and the Caribbean," IDB Publications (Books), Inter-American Development Bank, number 345.
    4. Dennis Rodgers & Jo Beall & Ravi Kanbur, 2011. "Latin American Urban Development into the 21st Century Towards a Renewed Perspective on the City," WIDER Working Paper Series 005, World Institute for Development Economic Research (UNU-WIDER).
    5. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    6. Strobl, Eric & Walsh, Frank, 2003. "Minimum Wages and Compliance: The Case of Trinidad and Tobago," Economic Development and Cultural Change, University of Chicago Press, vol. 51(2), pages 427-450, January.
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    Citations

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    Cited by:

    1. Bhorat, Haroon & Kanbur, Ravi & Mayet, Natasha, 2011. "The Determinants Of Minimum Wage Violation In South Africa," Working Papers 126535, Cornell University, Department of Applied Economics and Management.
    2. Haroon Bhorat & Ravi Kanbur & Natasha Mayet, 2013. "The impact of sectoral minimum wage laws on employment, wages, and hours of work in South Africa," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-27, December.
    3. repec:eee:wdevel:v:102:y:2018:i:c:p:135-157 is not listed on IDEAS
    4. Karolina Goraus & Piotr Lewandowski, 2016. "Minimum Wage Violation In Central And Eastern Europe," IBS Working Papers 03/2016, Instytut Badan Strukturalnych.
    5. Tony Fang & Carl Lin, 2015. "Minimum wages and employment in China," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-30, December.
    6. Andrea Garnero, 2018. "The dog that barks doesn’t bite: coverage and compliance of sectoral minimum wages in Italy," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-24, December.
    7. Haroon Bhorat, 2014. "Compliance with minimum wage laws in developing countries," IZA World of Labor, Institute for the Study of Labor (IZA), pages 1-80, August.
    8. 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.

    More about this item

    Keywords

    Minimum Wage; Depth of Violation; South Africa; Labor and Human Capital; Public Economics; J38; O55;

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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