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Welfare Reform on the Web (September 2011): Minimum Wage - overseas

Minimum wage impacts in China: estimates from a prespecified research design

J. Wang and M. Gunderson

Contemporary Economic Policy, vol. 29, 2011, p. 392-406

This article used a prespecified research design to estimate the employment effects of minimum wage changes in China over the period 2000-2007. At this period there were substantial minimum wage changes both over time and across different jurisdictions. Overall the minimum wage effects were broadly consistent with theoretical expectations and institutional realities of Chinese labour markets. These included negative employment effects in less prosperous regions but only being statistically significant in nonstate-owned organisations that tended to be more responsive to market pressures and that disproportionately employed rural migrant workers; much larger lagged effects reflecting the time needed for adjustments to occur; no adverse employment effects in the prosperous Eastern region; and a positive employment effect in state-owned enterprises in the East.

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