The Employment Effects of The Minimum Wage: Evidence from China
DOI:
https://doi.org/10.54097/0bwhxy52Keywords:
Minimum Wage; Employment Effect; Difference-in-difference Method.Abstract
The minimum wage system, as a labor legal system designed to ensure the basic survival and living needs of low-wage workers, was initially intended to protect the basic rights and interests of workers and meet their basic living needs. This article evaluates the appropriateness of China's minimum wage system from the perspective of its employment effects. Firstly, a simple regression model including a dummy variable for the minimum wage was established, and it was found that the implementation of the minimum wage system has a significant promotional effect on general employment. Secondly, through propensity score matching (PSM) and difference-in-differences (DID) analysis, it was found that the impact of raising the minimum wage standard on general employment is nonlinear. When the increase in the minimum wage standard is below a certain threshold level, it manifests as a suppressive effect on employment; when the increase in the minimum wage standard exceeds this threshold, it manifests as a promotional effect on employment.
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