The Response of Hours of Work to Increases in the Minimum Wage

This paper examines the effect of minimum wage increases on the hours of work of teenagers (ages 16 to 19) using monthly data from the Current Population Survey. Our findings are consistent with the prediction from neoclassical theory that minimum wage increases have a negative effect on labor demand. However, the estimates we provide here for the elasticity of hours of teen labor demanded with respect to the minimum wage suggest that alternative estimates based on aggregate employment consistently understate the total impact of minimum wage increases on teenage labor utilization.     

Cross‐Country Evidence on Labor Market Institutions and Young Adult Employment through the Financial Crisis

I develop and analyze a set of cross‐country facts regarding employment and wage setting institutions over the decade surrounding the 2008 financial crisis. Among long‐industrialized countries, young adult employment declined more than prime age employment over this time period. I show that differences in countries' wage setting institutions strongly predict variations in the magnitude of declines in young adult employment. Both unconditionally and conditional on changes in macroeconomic conditions, young adult employment declined 5 percentage points less in countries where wage setting is driven by collective bargaining arrangements than in countries with statutory wage floors. Evidence on the evolution of legislated minimum wage rates and of an asymmetry in the relationship between growth and young adult employment suggest an important role for a standard “wage rigidity” mechanism.     

The Origins and Early Impact of the Minimum Wage in Agriculture

This article examines the effects on wages and employment of the minimum wage in agriculture during the interwar period. It finds that the impact of regulation was to raise the wage for agricultural labourers by 13 per cent when it was (re)introduced in 1924, by 15 per cent in the late 1920s, and by more than 20 per cent in the 1930s. The effect on farm employment was to reduce it by about 54,000 (6.5 per cent) in 1929 up to a peak of 97,000 (13.3 per cent) in 1937. The minimum wage lifted out of poverty many families of farm labourers who remained employed, but it significantly lowered the incomes of farmers, particularly during the 1930s.     

Transition from School to Work in Japan

Using retrospective data of young people's work experience in Japan, this paper found that initial labor market conditions, i.e., when workers first enter the labor market after permanently leaving school, have a significant lasting impact on the employment experiences of workers in their teens and twenties. An increase in the unemployment rate at the time of labor market entry reduces the probability of gaining full-time regular employment and, more important, increases the future probability of workers of leaving employers by lowering the quality of job matches. It was also found that the vocational guidance or recommendations workers received at school could be effective in raising the quality of job matches. The adverse effect of initial unemployment rates on employment opportunities was most profoundly observed among female college graduates. J. Japan. Int. Econ., December 2001, 15(4), pp. 465–488. Faculty of Economics, Gakushuin University, 1-5-1 Mejiro Toshima-ku, Tokyo 171-8588, Japan; and Faculty of Economics, Meiji Gakuin University, 1-2-37 Shirokane-dai Minato-ku, Tokyo 108-8636, Japan. © 2001 Elsevier Science (USA).Journal of Economic Literature Classification Numbers: J24, J63, J64.     

Employment quality index for the South African labour market

ABSTRACT

While the South African government specifically set targets on job creation in its numerous economic strategies since the economic transition, various local studies examined the levels and trends in labour force, employment and unemployment to evaluate if these targets were met. However, the quality of employment has not been thoroughly examined. This is the first local study that fills the existing research gap by deriving a composite, multidimensional employment quality index by taking 18 indicators from seven dimensions into consideration: wage, work hours and flexibility, employment security, income security, social benefits, skills and participation. Using the 2010–16 Quarterly Labour Force Survey data, the empirical findings indicated that highly educated, white male workers aged at least 35 years, who lived in urban areas of the Western Cape and Gauteng provinces, and were involved in high skilled occupations in the formal, public sector enjoyed significantly better employment quality.     

Minimum Wages and Poverty: Will a $9.50 Federal Minimum Wage Really Help the Working Poor?

Using data drawn from the March Current Population Survey, we find that state and federal minimum wage increases between 2003 and 2007 had no effect on state poverty rates. When we then simulate the effects of a proposed federal minimum wage increase from $7.25 to $9.50 per hour, we find that such an increase will be even more poorly targeted to the working poor than was the last federal increase from $5.15 to $7.25 per hour. Assuming no negative employment effects, only 11.3% of workers who will gain live in poor households, compared to 15.8% from the last increase. When we allow for negative employment effects, we find that the working poor face a disproportionate share of the job losses. Our results suggest that raising the federal minimum wage continues to be an inadequate way to help the working poor.     

Labor Market Distortions in Côte d'Ivoire: Analyses of Employer‐Employee Data from the Manufacturing Sector*

Abstract: This paper investigates the extent and nature of distortions in the labor market in the Republic of Côte d'Ivoire by using quantile regression analysis on employer‐employee data from the manufacturing sector. We found that the labor markets in Côte d'Ivoire do not seem to be much distorted. Unions may influence employment through tenure but do not seem to influence wages directly except for vulnerable minorities that seem protected by unions. Establishment‐size wage effects are pronounced and highest for white‐collar workers. This may be explained by the efficiency wage theory, so that, even in the absence of unions, segmentation and inefficiencies will still be present as long as firms seek to retain their employees by paying wages above the market clearing level. The inefficiency arising from establishment‐size wage effects can be mitigated by education. Furthermore, the premium to education is found highly significantly positive only for higher education, and not for basic education, indicating that educational policies should also focus on higher education.     

Youth wage employment and parental education in Malawi

This paper looks at the relationship between the likelihood of being in regular wage employment and parental education for Malawian youth. It uses data from the third integrated household survey (IHS3). Only a mother's education is found to have a statistically significant effect on the likelihood of being in regular wage employment for young females and males. It is established that the effect of a mother's education on young males is significantly larger than that for young females. The paper also finds that, regardless of gender, a mother's education complements/reinforces the positive effect of a youth's own education on the probability of being in wage employment. The evidence from this paper points to the existence of an intergenerational poverty trap; with children of uneducated mothers or mothers with low education finding themselves outside regular wage jobs.     

The Wage and Employment Dynamics of Minimum Wage Workers

This study uses panel data to examine the wage and employment dynamics of minimum wage workers. Compared with workers earning above the minimum, minimum wage workers are much more likely to be new entrants or to exit the labor market. Changes in industry, occupation, and access to job training are particularly important to improving the wages of minimum wage workers. Many minimum wage workers earn less than their potential wage temporarily because of nonwork circumstances that make higher-paying jobs less attractive.     

Employment and wage adjustments at firms under distress in Japan: An analysis based upon a survey

We use the result from a survey of Japanese firms in manufacturing and service to investigate the choice of wage and employment adjustments when they needed to reduce substantially the total labor cost. Our regression analysis indicates that the large size reduction favors the layoffs of the core employees, whereas the base wage cuts are more likely if the firms do not feel immediate pressures from the external labor market or the strong competition in the product market. We also find some evidence that the concerns over adverse selection or demoralizing effects of wage cuts are real. Firms do try to avoid using base wage cuts if they consider these factors more important.     

On the heterogeneous short‐term effects of minimum wages on labor demand

A strand of the literature documents no effects or even positive effects of a higher minimum wage on employment. This evidence is frequently linked to the existence of monopsonistic labor markets or search frictions. However, empirical studies show that these findings could be related to a low short‐term minimum wage–employment elasticity in a competitive labor market. We show that mixed theoretical employment effects of a minimum wage policy can be predicted in the short term in assignment economies with price‐taker agents and no search frictions.     

Legal Minimum Wages and Employment Duration

We estimate the effect of minimum wages on employment duration using event history data from the 1988-1994 rounds of the National Longitudinal Survey of Youth. Existing literature takes two alternative tracks: Some studies predict reduced turnover due to rents created by minimum wages, others focus on the expected increase in turnover due to reduced job amenities and imperfect information. We find that for men, the net effect of a minimum wage depends on its magnitude relative to the typical wage in the local labor market. We find some evidence that where the minimum wage is low, separation rates for men hired at the minimum wage are reduced. We also find that as the relative value of the minimum wage rises, separation hazards increase. We interpret these findings as evidence that rents may accrue to minimum wage workers, but that the job matching process is undermined when the minimum wage binds.     

最低工资对广东省的就业影响研究

本文采用广东省1996～2007年的时间序列数据,运用协整定理以及脉冲响应函数,对最低工资的就业效应进行实证分析。结果表明,最低工资的提高会对就业产生正影响。因此,广东省应结合当地的实际情况适时调整最低工资,使其真正成为低收入阶层的有利保障。     

Minimum wage and employment in the fast food industry

Recent empirical studies on the impact of minimum wage legislation generate results that are inconsistent with conventional economic theory. Employing a methodology that compares affected with unaffected areas, these investigations indicate that employment levels are not adversely affected by the imposition of a minimum wage. Two studies in particular focus on the fast food industry. Although one study has come under attack for improperly measuring employment, an interesting theoretical question remains. This paper derives the demand for labor function of a fast food outlet facing price and profit margin constraints dictated by the company. The results of a minimum wage constraint are consistent with current empirical literature.     

Do higher minimum wages harm minority and inner-city teens?

Conclusion The recent proposal to increase the federal minimum wage from $5.15 to $6.15 per hour has opened a new debate among scholars and policymakers. We believe that the effects of minimum wage on school and work decision of teens should play a more central role in this deabte, which has traditionally focused mostly on employment effects.     

The minimum wage and the financialization of firms: Evidence from China

This paper utilizes China's A-listed firm data to investigate whether increasing the minimum wage promotes the financialization of firms. We apply instrumental variable estimation and various robustness tests to address measurement errors and potential endogeneity. We find robust and consistent evidence that exposure to higher minimum wages increases a firm's investment in financial assets. Furthermore, we explore the effects of moderators, such as increased employment stickiness, intensification of financial constraints, and reduced innovation activities as potential explanations for the positive effect of increasing minimum wages. Moreover, firms located in non-coastal cities with relatively higher equity concentration and lower market competition are substantially more incentivized to increase investment in financial assets. Overall, this paper provides new insights into understanding the effects of increasing labor costs on firms' asset allocation in emerging market economies.     

最低工资制度对劳动力市场影响的实证分析

本文对最低工资理论模型进行了拓展分析,并以深圳为案例分析了最低工资制度对区域就业的影响。在跨区域劳动力流动的情况下,区域劳动力市场均衡工资趋近最低工资标准,并且不会导致区域就业量的下降。     

Hukou system reforms and skilled-unskilled wage inequality in China

In China, rural migrant workers usually cannot get fair treatment due to the hukou system. This paper investigates how hukou system reforms affect the skilled-unskilled wage inequality through the general equilibrium approach. In the basic model, we find that an increase in the strength of hukou system reforms will narrow down the wage inequality if the urban skilled sector is more capital intensive than the urban unskilled sector. In addition, we separately extend the basic model by introducing the endogenous minimum wage and an informal sector, and find that in these two extended cases the main results of the basic model will conditionally or unconditionally hold. When we consider some empirical evidences in China, our models predict that an increase in the strength of hukou system reforms will reduce the wage inequality.     

The Effect of the Tipped Minimum Wage on Employees in the U.S. Restaurant Industry

According to federal law in 2013, employers can take a credit of up to $5.12 for tips received by workers in satisfying the minimum‐wage requirement of $7.25. This article uses interstate variation in laws regarding tip credits and minimum wages to identify the effects of reducing or eliminating the tip credit on employment, hours, and earnings in the U.S. restaurant industry. Using data from the Quarterly Census of Employment and Wages and the Current Population Survey, we find that a reduction in the tip credit increases weekly earnings but reduces employment in the full‐service restaurant industry and for tipped workers. The results are robust to controls for spatial heterogeneity in employment trends and are supported by a series of falsification tests.     

Full-Time and Part-Time Work and the Gender Wage Gap

Using hourly and weekly wages from the Canadian Labour Force Survey from 2000 until 2018, workers were separated into full-time and part-time and the following striking observation was documented. The overall gender wage gap is larger than either the full-time pay gap or the part-time pay gap, even after controlling for detailed personal and job characteristics. This result is a consequence of two findings: (i) part-time wages are lower than full-time wages, and (ii) the majority of part-time workers are women. In aggregation, this brings down the average female wage, leading to a larger aggregate gender wage gap. This was further linked to a differential selection by gender into full-time and part-time work, with women of higher earnings potential being overrepresented in the pool of part-time workers, resulting in no gender pay gap in the part-time worker category. Policies targeted at encouraging full-time employment for women should therefore reduce the gender wage gap.