%0 Report
        %A Tonin, Mirco
        %T Underreporting of Earnings and the Minimum Wage Spike
        %D 2011
        %8 2011 Aug
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 5942
        %U https://www.iza.org/index.php/publications/dp5942
        %X This paper documents a positive correlation within European labour markets between the proportion of full-time employees with earnings on the minimum wage and the extent of underreporting of earnings in the economy. Using a simple model of a competitive labour market, I show how this correlation can emerge as a result of the common dependence of both quantities on the strength of enforcement of fiscal regulation. This suggests that a high spike in the wage distribution at the minimum wage level is, in some contexts, an issue of fiscal enforcement, more than a labour market issue.
        %K lighthouse effect
%K minimum wage
%K spike
%K underreporting