Economics at your fingertips  

The minimum wage, informal pay and tax enforcement

Anikó Bíró, Daniel Prinz () and László Sándor
Additional contact information
László Sándor: Institute for Fiscal Studies

No W21/41, IFS Working Papers from Institute for Fiscal Studies

Abstract: We study the taxation of the minimum wage in an environment with imperfect enforcement and informality. We leverage an increase in the audit threat for earnings below a reporting threshold at twice the minimum wage in Hungary and estimate reporting and employment responses with administrative panel data. Using bunching estimators and difference-in-differences methods, we show that a substantial share of those who report earning the minimum wage earn at least the same amount off the books. When enforcement is imperfect, a taxed minimum wage serves as a backstop on underreporting and recovers some revenue but also increases informality.

Date: 2021-11-15
New Economics Papers: this item is included in nep-acc, nep-cwa, nep-his, nep-iue and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) ... -tax-enforcement.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Journal Article: The minimum wage, informal pay, and tax enforcement (2022) Downloads
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:

Ordering information: This working paper can be ordered from
The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE

Access Statistics for this paper

More papers in IFS Working Papers from Institute for Fiscal Studies The Institute for Fiscal Studies 7 Ridgmount Street LONDON WC1E 7AE. Contact information at EDIRC.
Bibliographic data for series maintained by Emma Hyman ().

Page updated 2023-06-04
Handle: RePEc:ifs:ifsewp:21/41