TY  - RPRT
        AU  - Danziger, Leif
        TI  - Noncompliance and the Effects of the Minimum Wage on Hours and Welfare in Competitive Labor Markets
        PY  - 2009/Sep/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 4408
        UR  - https://www.iza.org/publications/dp4408
        AB  - This paper shows that increases in the minimum wage rate can have ambiguous effects on the working hours and welfare of employed workers in competitive labor markets. The reason is that employers may not comply with the minimum wage legislation and instead pay a lower subminimum wage rate. If workers are risk neutral, we prove that working hours and welfare are invariant to the minimum wage rate. If workers are risk averse and imprudent (which is the empirically likely case), then working hours decrease with the minimum wage rate, while their welfare may increase.
        KW  - competitive labor markets
KW  - noncompliance
KW  - minimum wage
KW  - working hours
KW  - welfare
        ER  -