TY  - RPRT
        AU  - Tonin, Mirco
        TI  - Underreporting of Earnings and the Minimum Wage Spike
        PY  - 2011/Aug/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 5942
        UR  - https://www.iza.org/index.php/publications/dp5942
        AB  - 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.
        KW  - lighthouse effect
KW  - minimum wage
KW  - spike
KW  - underreporting
        ER  -