Using household and labour force survey data from 11 developing
countries, the authors calculate rates of minimum wage compliance for formal/
informal employees covered by current legislation and assess the average “depth”
of violations. Though compliance is negatively related to the ratio of minimum to
median wages, countries with a national minimum wage set at a meaningful level
typically achieve higher compliance rates than countries with occupational or industry-specific
minimum wage systems. However, better compliance – especially
for women, ethnic groups, and unskilled and informal workers – also depends on
contextualized yet comprehensive minimum wage policies combining union/employer
involvement, awareness-raising and credible enforcement.