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Nicolas Gavoille

Latvijas Banka and Stockholm School of Economics in Riga, Latvia

Contributing to World of Labour allowed me to reflect on and synthesize a specific strand of the literature. In writing the note, connections across papers emerged more clearly than I had anticipated. I hope this overview will be helpful to both researchers and policymakers seeking a concise entry point into the topic.

World of Labour role

Author

Current position

Principal research economist, Latvijas Banka; Associate Professor, Stockholm School of Economics in Riga

Research interest

Public economics, labour economics, political economy

Website

https://sites.google.com/site/nicolasgavoilleeconomist/

Qualifications

PhD, Economics, University of Rennes

Selected publications

  • "What we pay in the shadows: Labor tax evasion, minimum wage hike and employment." Journal of Public Economics, 228, 105027 (2023) (with A. Zasova).

  • "Minimum wage spike and income underreporting: A back-of-the-envelope-wage analysis." Journal of Comparative Economics, 51(1), 372-402 (2023) (with A. Zasova).

  • "Foreign ownership and labor tax evasion: Evidence from Latvia." Economics Letters, 207, 110030 (2021) (with A. Zasova).

  • "Electoral competition and political selection: An analysis of the activity of French deputies, 1958–2012." European Economic Review, 92, 180-195 (2017) (with M. Verschelde).

Article(s)

  • Minimum wage policy and undeclared wages in transition economies

    Increasing minimum wage can decrease labour tax evasion

    Nicolas Gavoille, March 2026

    How do minimum wage policies interact with labour tax evasion? In many transition economies, two features stand out: a large spike in the wage distribution at the minimum wage and widespread use of “envelope wages”—undeclared cash paid in addition to official earnings. This spike can be explained by the over-representation of tax-evading employers among minimum wage payers. In such a context, raising the minimum wage may serve as an enforcement tool by compelling evading firms to convert part of the undeclared pay into formal wages in order to comply with the legal minimum.

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