Compliance with the Institutional Wage in Dualistic Models

Ana Paula Martins

Journal of Economics and Econometrics, 2011, vol. 54, issue 2, 93-126

Abstract: This research extends simple two-sector models in order to inquire the impact of the extent of coverage or enforcement of minimum wage legislation in one of the sectors on the equilibrium outcome. Two versions of institutional wage avoidance are presented. They may be seen as representing different institutional detection rules: one working through worker complaint, the other through firm sampling inspection (and enforcement) by the legal system. Both cases are modelled as enlargements of two dualistic models: Harris-Todaro (the wage in the other sector is market determined) and Bhagwati-Hamada (the wage in the other sector is institutionally fixed and coverage is complete). Impact on population flows of changes in degree of coverage (compliance) is also confronted with the effect of a change in the institutional wage for each scenario.

Keywords: Migration; Mobility; Minimum Wages; Segmented Labor Markets; Informal Sector; Regional Labor Markets; Dualistic Models; Coverage. (search for similar items in EconPapers)
JEL-codes: F22 J38 J42 J61 J62 K42 O15 O17 O18 R23 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Compliance with the Institutional Wage in Dualistic Models (2011)
Working Paper: Compliance with the Institutional Wage in Dualistic Models (2011)
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