Public Enforcement/Private Monitoring: Evaluating a New Approach to Regulating the Minimum Wage

Posted: 4 Oct 2004

See all articles by David Weil

David Weil

Brandeis University - The Heller School for Social Policy and Management; Harvard Kennedy School Ash Institute for Democracy

Abstract

This paper examines compliance with federal minimum wage laws in the U.S. apparel industry and analyzes the impact of new methods of intervention designed to improve regulatory performance. Drawing on data from a randomized survey of apparel contractors, the author evaluates the impact of agreements between manufacturers and the government used to monitor contractor behavior as a means of improving compliance outcomes. Several non-regulatory variables predicted by theory to be important influences - the level of work skills, for example, and product market factors related to the elasticity of labor demand - are indeed found to be correlated with compliance. Nonetheless, stringent forms of contractor monitoring are associated with substantial reductions in violations of minimum wage standards. The results suggest that well-designed private/public monitoring efforts can lead to significant improvements in compliance with labor standards.

Keywords: Minimum wage compliance, federal minimum wage laws

JEL Classification: J31, J38, D63, I31

Suggested Citation

Weil, David, Public Enforcement/Private Monitoring: Evaluating a New Approach to Regulating the Minimum Wage. Industrial and Labor Relations Review, Vol. 58, No. 2, 2004, Available at SSRN: https://ssrn.com/abstract=598864

David Weil (Contact Author)

Brandeis University - The Heller School for Social Policy and Management ( email )

P.O. Box 549110/MS 035
415 South Street
Waltham, MA 02454
United States

Harvard Kennedy School Ash Institute for Democracy ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

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