The minimum wage, informal pay, and tax enforcement q

• 成果类型: Article
• 署名作者: Biro, Aniko; Prinz, Daniel; Sandor, Laszlo
• 署名单位: HUN-REN; HUN-REN Centre for Economic & Regional Studies; The World Bank
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2022.104728
• 发表日期: 2022
• 关键词: Minimum wage; Informal pay; Tax evasion

摘要

We study the implications of the minimum wage for taxation in an environment with imperfect enforce-ment and informality. Leveraging an increase in the audit threat for declared earnings below a threshold at twice the minimum wage in Hungary, we estimate reporting and employment responses with admin-istrative panel data. Our bunching and difference-in-differences results show that a substantial share of those who report earning the minimum wage earn at least the same amount off the books. Our key insight is that a taxed minimum wage serves as a backstop on underreporting and recovers some revenue -even though it also increases informality. Published by Elsevier B.V.