A new study reveals the impact of minimum wage hikes on envelope wages and employment in tax-compliant firms

In their recent article published in Ir.lv, Nicolas Gavoille and Anna Zasova explore the consequences of raising the minimum wage in Latvia. One of the key takeaways from their work is that an increase in the minimum wage not only reduces envelope wages but also diminishes employment levels within tax-compliant companies.

Gavoille and Zasova’s research is based on a study conducted as part of the EEA-Norway grant project No S-BMT-21-8 (LT08-2- LMT-K-01-073). You can read the full paper by following this link: What we pay in the shadows: Labor tax evasion, minimum wage hike and employment