The Expected Penalty for Committing a Crime: An Analysis of Minimum Wage Violations

John R. Lott and Russell D. Roberts

Journal of Human Resources, 1995, vol. 30, issue 2, 397-408

Abstract: Several papers have noted and sought to explain the paradox of minimum wage law compliance. Compliance rates are high even though the penalty for violating the law is allegedly less than the underpayment to workers. By comparison, we show that the actual penalty exceeds the underpayment. We combine our estimates of the costs of violating the law with estimates of the probability of apprehension to arrive at the expected cost of violating the law. In contrast with previous work, we find that the expected costs are sufficiently high to make compliance rational.

Date: 1995
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://www.jstor.org/stable/pdfplus/146126
A subscription is required to access pdf files. Pay per article is available.

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:uwp:jhriss:v:30:y:1995:i:2:p:397-408

Access Statistics for this article

More articles in Journal of Human Resources from University of Wisconsin Press
Bibliographic data for series maintained by ().