Macroeconomic Effects of Minimum Wage Increases in an Economy with Wage Underreporting

Anastasiia Antonova ()
Additional contact information
Anastasiia Antonova: National Bank of Ukraine

Visnyk of the National Bank of Ukraine, 2018, issue 246, 10-33

Abstract: I have built a monetary DSGE model to investigate how wage underreporting in an economy characterized by a minimum wage regime affects the macroeconomic response to a minimum wage increase. The model is calibrated and estimated for Ukraine. The main result is that under a higher degree of wage underreporting, the economy is less responsive to a minimum wage shock. Quantitatively, the magnitude of the response to a minimum wage shock is affected by the share of non-Ricardian households, that is, households that do not have access to financial markets and consequently consume all of their income each period.

Keywords: Minimum wage; wage underreporting; shadow economy; DSGE; non-Ricardian households; New-Keynesian models (search for similar items in EconPapers)
JEL-codes: E24 E26 J31 J46 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://journal.bank.gov.ua/en/article/2018/246/02 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ukb:journl:y:2018:i:246:p:10-33

DOI: 10.26531/vnbu2018.245.010

Access Statistics for this article

More articles in Visnyk of the National Bank of Ukraine from National Bank of Ukraine Contact information at EDIRC.
Bibliographic data for series maintained by Research Unit ().