The minimum wage in an adverse selection economy

This paper examines the welfare implications of minimum wagelegislation in a simple two-sector model, in which greater effortis required to produce in the higher productivity sector andindividual ability is private. An adverse selection distortionarises so that, without a minimum wage, too many workers workin the primary sector because of the high wage based on averageability. These workers produce relatively little, while exertingeffort. The paper shows that a minimum wage, in the low-productivitysector, can correct this distortion but may lower welfare.     

低工资人群和最低工资政策

北京师范大学收入分配与贫困研究中心主任李实教授从四个方面阐述了低工资人群和中国最低工资政策的研究背景。     

提高最低工资标准是个劣招

最低工资标准就是对工资这个市场经济中极端重要的价格的扭曲，会造成小生意者退出市场，从而让弱势劳工失去工作。     

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.     

Protection,real wage resistance and employment

Zusammenfassung Protektion, starre Reall?hne und Besch?ftigung. — In diesem Aufsatz wird ein Portfolio-Modell für eine offene Volkswirtschaft vorgestellt, mit dem die Besch?ftigungswirkungen analysiert werden, die von der Einführung eines Zolls bei flexiblen Wechselkursen und starren Reall?hnen ausgehen. Von den L?hnen wird angenommen, da\ sie sich nur allm?hlich einem exogenen Reallohnziel anpassen. Das Modell wird unter verschiedenen Annahmen über die Verwendung der Zolleinnahmen gel?st. In jedem der F?lle wirkt der Zoll zun?chst expansiv. Dagegen h?ngen die langfristigen Besch?ftigungseffekte entscheidend davon ab, wie die Zolleinnahmen verwendet werden. Abschlie\end werden die Ansto\wirkungen für den Fall einer vollen Indexierung betrachtet.

---

Résumé Protection, la résistance du salaire réel et l’emploi. — Cet article présente un modèle de balance de portefeuille d’une économie ouverte qui est appliqué pour analyser les effets d’emploi d’un tarif des douanes imposé sous les conditions des taux de change flexibles et de la résistance du salaire réel. Il est supposé que les salaires s’ajustent graduellement à un objectif exogène de salaire réel. Le modèle est solutionné sous quelques suppositions concernant la disposition des recettes douanières. Dans chaque cas, l’effet immédiat est expansif. En contraste, il est démontré que les effects d’emploi à long terme dépendent décisivement de la disposition des recettes douanières. Finalement, les effets d’impact sont reconsidérés pour le cas d’une indexation totale.

---

Resumen Protección, resistencia de salarios reales y empleo. — En este artículo se presenta un modelo de equilibrio de cartera de una economía abierta para ser usado para analizar los efectos de empleo de una tarifa impuesta bajo tasas de cambio flexibles y resistencia salarial real. Se supone que los salarios se ajustan gradualmente hacia una meta exógena de salario real. El modelo se resuelve bajo varios supuestos sobre la disposición de ingresos tarifarios. En cada instancia, la tarifa es expansionaria por impacto. En contraste, los efectos ocupacionales de largo plazo resultan girar críticamente trente a la disposición de ingresos tarifarios. En una sección final, se rcconsideran los efectos del impacto en presencia de una indexación completa.

     

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.     

经济新形势下最低工资制度的执行情况研究

文章利用2013年中国家庭收入调查数据(CHIP),对经济新形势下最低工资制度在城镇职工中的执行情况进行了估计。研究发现,月最低工资制度得到了良好执行,覆盖率达到92.65%,但当使用小时最低工资制度时,覆盖率下降为88.34%。此外,文章进一步测算了小时最低工资标准在不同特征城镇职工中的执行情况,最后提出相关建设性意见。     

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 employment and wage effects of export VAT rebates: evidence from China

Review of World Economics - This paper studies the employment and wage effects of VAT rebates to exporters with comprehensive firm-product-level data of China. It is found that the adjustments in...     

The minimum wage,exports, and firm performance: Evidence from Indonesia

This paper examines the interrelationship between changes in the provincial minimum wage, firms’ export behavior, and firms’ performance in Indonesia. In this regard, we apply a two-stage least squares regression analysis to detailed firm-level data of manufacturing enterprises during 2002–2014. We find that an increase in the minimum wage is associated with a decrease in a firm’s employment and productivity, but increase in its probability of exporting and markup. We also use the 2012 minimum wage reform in Indonesia to conduct a difference-in-difference analysis to further mitigate the potential endogeneity of minimum wage regulation. Our findings are generally robust to alternative estimation methods. Moreover, quantile regression results indicate that the average wage, firm size, and the education level of workers also affect the predictions. Above all, this study suggests that Indonesian exports and the country’s comparative advantage in international markets are not negligibly affected by higher labor costs caused by the growth in the minimum wage.     

The effect of unemployment among union members on union wage contracts

Conclusions In this paper a simple modification of union behavior has been suggested. This modification endogenized union preferences by making them depend on the level of unemployment among union members. When placed in the context of a two-sector economy, with a unionized and nonunionized sector and stochastic demand conditions, the model generated realistic patterns of wage and employment outcomes. These outcomes were shown to be critically sensitive to the union's concern with employment versus high wages. To the extent that such concerns are established through organizations, labor market outcomes in economies with a high degree of unionization will depend on the pattern of institutional arrangements as well as underlying economic influences, such as the level of productivity, the level of aggregate demand, and the composition of aggregate demand.     

Skill compression, wage differentials, and employment: Germany vs the US

Germany's more compressed wage structure is widely viewed asthe main cause of the German-US difference in employment andunemployment, but part of the compression is due to Germanyhaving a narrower distribution of skills than the US. Even adjustedfor skills, however, we find that Germany has a more compressedwage distribution than the US. But relatively little of theUS-German employment difference can be attributed to the compressedwage distribution. We find that jobless Germans have nearlythe same skills as employed Germans and look more like averageAmericans than like low skilled Americans, which runs counterto the wage compression hypothesis. Given these patterns, thepay and employment experience of low skilled Americans is apoor counterfactual for assessing how reductions in pay mightaffect jobless Germans.     

Returns to military service in off-farm wage employment: Evidence from rural China

This paper studies the returns to military service in off-farm wage employment and the implications of military service on the rural-urban transition in rural China. We exploit government-induced variations in aggregate enrollment rates as our instrumental variable. Using data from the China Family Panel Studies, we find a substantial positive effect of military service on off-farm wage employment and earnings for men of rural origin, which is comparable in magnitude to the estimated returns to a college education in China. We also provide evidence that the earnings premium is likely to be explained by improved access to urban formal employment, political and human capital accumulation. However, in spite of the off-farm employment gain for all cohorts, we find that the positive earnings premium of military service is mainly concentrated among the pre-1970 cohort.     

Macroeconomic policy, wage setting, and employment - what difference does the EMU make?

The likely impact of the EMU on the variability and level ofemployment is analysed. The major conclusions are as follows.(i) Although an inflation-target regime will constrain monetarypolicy of a non-participant in the EMU, it still leaves considerablescope for exchange-rate changes in the case of country-specificdemand shocks, provided that there is some nominal price andwage flexibility. (ii) Variations in payroll taxes can be usedas a substitute for exchange-rate changes in the EMU, but itwill be an imperfect substitute. (iii) Money-wage flexibilityis likely to be larger inside than outside the EMU, but probablynot by much. (iv) There are various mechanisms through whichthe EMU may affect the incentives for labour-market reform toreduce equilibrium unemployment, but the net impact is highlyuncertain.     

The effect of transitional employment on search duration: A selectivity approach

This paper presents an analysis of the impact of transitional employment (employment fully contained within a search spell) on search duration. Log-linear duration equations, which are derived from an accelerated time-life specification, are estimated separately for those who take and do not take a transitional job. Selectivity terms are included as additional regressors in the specification in order to control for the endogeneity of the decision to take a transitional job. The presence of right-censored search spells is controlled for and the standard errors are corrected to account for the inclusion of generated regressors. A searcher who takes a transitional job can expect to be searching for permanent employment almost eight months longer and has a substantially different escape pattern than a searcher who does not take a transitional job.The author has benefitted from discussions with and comments from many colleagues. Special thanks are extended to Insan Tunali for making his error-correction formulas available. Support from the Research Council of the College of Business Administration, Georgia State University, is gratefully acknowledged.     

The effect of mergers on employment and wages: Evidence from Japan

This study investigates the impact of mergers on employment and employees’ wages in Japan, based on 111 mergers between listed firms observed between 1990 and 2003. Typically, the number of employees decreases by 4.45% three years after a merger, even after changes in sales and other variables are controlled. Firms that experience related mergers, and rescue mergers are more likely to decrease the number of workers. At the same time, wages increase by 5.46% per employee. These results suggest that the main motivation behind mergers is not to divest employees of their wealth.