We uncover a hidden illegal fishing practice: the use of fishing nets with illegally small mesh size. The small mesh prevents nearly all fish of saleable size from escaping the net, but also traps a large number of fish which are too small to be sold on the market and are therefore discarded at...

The minimum wage rate has been introduced in many countries as a means of alleviating the poverty of the working poor. This paper shows, however, that an imperfectly enforced minimum wage rate causes small firms to face an upward-sloping labor supply schedule. Since this turns these firms into...

Well-functioning groups enforce social norms that restrain opportunism, but the social structure of a society may encourage or inhibit norm enforcement. Here we study how the exogenous assignment to different positions in an extreme social hierarchy - the caste system - affects individuals'...

This paper shows that increases in the minimum wage rate can have ambiguous effects on the working hours and welfare of employed workers in competitive labor markets. The reason is that employers may not comply with the minimum wage legislation and instead pay a lower subminimum wage rate. If...

We construct a simple model of compulsory schooling in which legislation and compliance are endogenously determined by individuals disciplined by social norms, optimizing their voting decisions and the school attendance of their children. The model provides a formal framework for interpreting...

Since formal laws can be observed or ignored to varying degrees, the actual enforcement regime shapes incentives and constraints. Most of the studies exploring EPL effects on labour market performance implicitly assume that EPL compliance is near to complete and therefore all firms bear full...

Recent economic literature emphasizes the importance of moral considerations to explain compliance behavior with respect to underground activities such as tax evasion. A considerable amount of research aims to identify factors that affect the intrinsic motivation to comply. However, the causal...

Agents operating in illegal markets cannot resort to the justice system to guarantee property rights, to enforce contracts, or to seek protection from competitors' improper behaviors. In these contexts, violence is used to enforce previous agreements and to fight for market share. This...