There exists evidence on minimum wage non-binding and non-compliance
To analyze the binding and enforcement of minimum wage, we illustrate the monthly wage distribution for the main job of workers, using the Epanechnikov kernel Density with bandwidth=0.1, and the Viet Nam Household Living Standards Survey 2014 data. Minimum wage is deemed biding if wages in an otherwise continuous distribution are “pulled up” to the level of the statutory minimum. If a minimum is set below the market clearing wage, it may still be binding if it is used as a reference point for setting wages higher in the wage distribution. A minimum wage can bind wages both in the formal sector and for informal workers (through the so-called “lighthouse effect”). Besides,
To analyze the binding and enforcement of minimum wage, we illustrate the monthly wage distribution for the main job of workers, using the Epanechnikov kernel Density with bandwidth=0.1, and the Viet Nam Household Living Standards Survey 2014 data. Minimum wage is deemed biding if wages in an otherwise continuous distribution are “pulled up” to the level of the statutory minimum. If a minimum is set below the market clearing wage, it may still be binding if it is used as a reference point for setting wages higher in the wage distribution. A minimum wage can bind wages both in the formal sector and for informal workers (through the so-called “lighthouse effect”). Besides,