Minimum wage and tax evasion: Theory and evidence

• 成果类型: Article
• 署名作者: Tonin, Mirco
• 署名单位: University of Southampton; IZA Institute Labor Economics
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2011.04.005
• 发表日期: 2011
• 页码: 1635-1651
• 关键词: tax evasion; Minimum wage; spike

摘要

This paper examines the interaction between minimum wage legislation and tax evasion by employed labor. I develop a model in which firms and workers may agree to report less than the true amount of earnings to the fiscal authorities. I show that introducing a minimum wage creates a spike in the distribution of declared earnings and induces higher compliance by some agents, thus reducing their disposable income. The comparison of food consumption and of the consumption-income gap before and after the massive minimum wage hike that took place in Hungary in 2001 reveals that households who appeared to benefit from the hike actually experienced a drop compared to similar but unaffected households, thus supporting the prediction of the theory. (C) 2011 Elsevier B.V. All rights reserved.