Minimum wage and tax kink effects in the formal and informal sector in Zambia

Samuel Bryson, Evaristo Mwale and Kwabena Adu-Ababio

No wp-2024-10, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: This paper explores two policy interventions in Zambia, a minimum wage hike in 2018 and an upward revision in the first kink in the progressive income tax schedule in 2017, to examine and compare the impact of minimum wage and tax kink changes on wages and the earnings distribution in the formal and informal sectors. The analysis builds on two thus far separate strands of literature that investigate the effects of minimum wages and bunching around tax kinks in developing countries using Zambian personal income tax data and data from the ILO Labour Force Surveys over the period 2012-21.

Keywords: Tax bunching; Personal income tax; Minimum wage; Informality; Zambia (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-inv, nep-iue, nep-lma, nep-pbe and nep-pub
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