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| Tekijä: | Basu, A.K. Chau, N.H. Kanbur, R. |
| Otsikko: | Turning a blind eye: costly enforcement, credible commitment and minimum wage laws |
| Lehti: | Economic Journal
2010 : MAR, VOL 120:543 p. 244-269 |
| Asiasana: | minimum wage legislation competition commitment government incomes |
| Vapaa asiasana: | enforcement |
| Kieli: | eng |
| Tiivistelmä: | In several countries, non-compliance with minimum wage legislation is widespread and authorities may be seen as having turned a blind eye to legislation they have themselves passed. In this paper it is shown that doing this can indeed be an equilibrium phenomenon with ex post credibility, in a model of minimum wage policy with imperfect competition, imperfect enforcement, and imperfect commitment. Since credible enforcement requires costly ex post transfer of income from employers to workers, a government concerned only with efficiency but not with distribution is shown, paradoxically, to be unable to credibly elicit efficiency improvements via minimum wage reform. |
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