Noncompliance Behavior of Risk-Averse Firms Under the Minimum Wage Law
This article is concerned with the law evasion (reduced wages) and law avoidance (modified employment) aspects of noncompliance behavior by risk-averse firms under the minimum wage law. It demonstrates that the adverse disemployment effects of a legal minimum wage under the conventional "full compliance" assumption should be modified by an "employment effect" of noncompliance, although it is shown that risk-averse violating firms would employ less labor than they would if they were risk-neutral. Findings suggest that the most effective strategy for motivating risk-averse firms to comply with minimum wage laws is imposing stiffer penalty fees.
Year of publication: |
1992
|
---|---|
Authors: | Chang, Yang-Ming |
Published in: |
Public Finance Review. - Vol. 20.1992, 3, p. 390-401
|
Saved in:
Online Resource
Saved in favorites
Similar items by person
-
Risk avoidance and risk taking under uncertainty : a graphical analysis
Chang, Yang-ming, (2008)
-
Trade verticality and structural change in industries : the cases of Taiwan and South Korea
Chen, Hungyi, (2006)
-
Pool revenue sharing, team investments, and competitive balance in professional sports
Chang, Yang-ming, (2009)
- More ...