Minimum wage violation in central and eastern Europe

Abstract

AbstractThis article analyses minimum wage violations over the period 2003–12 in ten central and eastern European countries which all have national statutory minimum wages. Using European Union Statistics on Income and Living Conditions (EU‐SILC) data and the methodology proposed by Bhorat, Kanbur and Mayet (2013), the authors measure the incidence and depth of violation. In addition, they conduct regression analyses on individual, workplace and macro‐level determinants of non‐compliance. While the incidence of violation remains relatively low, the workers that minimum wage policies seek to protect appear to be the most likely to be affected by non‐compliance. Over time, higher minimum to average wage ratios are related to a higher incidence of violation.