• East Asian Economic Review
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• v.24 no.3
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• pp.253-273
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• 2020

This paper investigates the impact of the effective minimum wage, defined as the log difference between the minimum and the median wages, on wage inequalities in the OECD countries. Unlike the previous studies that focus on single countries in which the minimum wage has no cross-sectional variation and rely instead on within-country variations of wage distribution across regions or socio-economic characteristics, we use a country panel that allows for both cross-sectional and time-series variations in minimum wage. We also control for more factors than in the previous studies whose absence may cause endogeneity. Our results confirm the previous findings that increases in minimum wage alleviate the wage inequality at the lower tail of the wage distribution, while having little effect at the upper tail. The estimated effect is larger for women than for men, which is consistent with the fact that the share of workers who are directly affected by the changes in minimum wage is bigger among women than men. An application of the IVs of Autor, Manning and Smith (2016) supports the robustness of our findings.

• Journal of Labour Economics
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• v.39 no.4
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• pp.31-56
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• 2016

This study analyzes the effect of a minimum wage on the wage compression within Korean establishments. The results are as follows. Firstly, increases of a ratio of workers who get minimum wage within establishments have a effect to compress the wage distribution within establishments. Secondly, the establishment average wages get lower as their minimum wage ratios get larger. In this situation, high wage group's wages fall deeply than low wage group's these. Thirdly, the relative wages of high wage group to low wage group tend to be small as their minimum wage ratios get larger. To conclude, a increase of minimum wage has a effect to raise low wage workers' wages directly, and to reduce high wage workers' wages or increase rates indirectly. And the wage distributions are compressed as a result. So government's policy to increase minimum wage will have a result in reducing wage inequality.

• Journal of Labour Economics
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• v.41 no.4
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• pp.107-131
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• 2018

This paper presents a model for the Minimum Wage Commission's decision process and analyzes the strategic actions of the participants in the process. The Minimum Wage Commission has used two ways of setting the minimum wage. The commission has voted either on the labor's against the management' final proposals or has voted on the public interest commissioners' proposal. According to the model, the minimum wage is determined at a level that is very close to or at a level preferred by the median voter among the public interest commissioners. But the probability of adopting labor or management proposal is ex-ante the same. Empirical evidence from the minimum wage decision process is consistent with the predictions of the model. The probability of adopting the labor's proposal in the minimum wage commission voting is not statistically significantly different from 50%. The model also suggests that the preference of the median voter among public interest commissioners determines the minimum wage level. Since the government appoints public interest commissioners and thus, in fact, the median voters, the government can decide the minimum wage level. This proposition is also consistent with data. The annual growth rate of the minimum wage under the progressive governments is higher than under conservative governments.

• Journal of Labour Economics
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• v.44 no.1
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• pp.31-72
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• 2021

This study uses the 12-21st waves of KLIPS to estimate the effect of the increase in the minimum wage on the individual's labor market transition through a multinomial logit. In particular, we examine whether there was an additional effect of the rapid increase in the minimum wage in 2018. The main results of this study are as follows. First, the increase in the minimum wage in Korea is found to have increased the probability of becoming unemployed for both wage workers and self-employed, but there is no additional impact found from the 2018 minimum wage increase. Second, the increase in the minimum wage is found to increase the likelihood of the self-employed entering into wage workers, especially temporary and daily workers. Third, we have found that the increase in the minimum wage in 2018 adversely affected self-employed people with high school education, and significantly lowered young wage workers entering into self-employed. Our results suggest that the recent increase in the minimum wage may be responsible for declining self-employment rate in Korea, and may have a negative effect on the quality of employment because the increase in minimum wage can lead to an increase in temporary and daily wage workers.

• Journal of Labour Economics
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• v.42 no.1
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• pp.73-105
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• 2019

In this paper, we investigated the impacts of minimum wage on the working hours and labor income of wage earners considering coverage of minimum wage. The results show that the increase in the proportion of workers influenced by the minimum wage in the industry has a negative effect on the average monthly working hours and the average monthly salary of workers affected by the minimum wage. This implies that firms try to offset the rise in labor costs caused by increase in the minimum wage by adjusting the working hours of the employees influenced by the minimum wage. Our finding suggests that the minimum wage policy would reduce the labor income of workers affected by the minimum wage.

• The Journal of Industrial Distribution & Business
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• v.12 no.3
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• pp.31-41
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• 2021

Purpose: The purpose of this paper is to analyze the impact of the minimum wage policy and the employment labor force in Myanmar by exploring firms' actions such as installing supplementary machines to substitute for labor resources and by addressing gender issues in employment. Research design, data, and methodology: This paper applies a fixed-effect estimation method by using the World Bank's enterprise panel data set surveyed in Myanmar. Results: Findings suggest that the minimum wage reduces both full-time and part-time employment, while the first minimum wage policy increases overall female employment. The adverse impacts are more pronounced for female employees of Joint Venture enterprises and enterprises located in the less-populated regions. Investment in capital such as equipment and machinery increase to substitute for labor after the minimum wage policy implementation; as a result, full-time employment slightly decreases. Conclusions: Appropriate measures concerning the minimum wage policy must be prepared by the government and institutions related to the labor union to serve the well-being of employees. Government of Myanmar should fix the minimum wage in a reasonable period based on the fiscal year for both employers and employees to prevent possible issues and losses resulting from the minimum wage being set.

• Journal of Labour Economics
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• v.44 no.1
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• pp.73-101
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• 2021

Employing bunching estimators of Cengiz et al. (2019) for data from the "Economically Active Population Survey," this paper estimates the effect of minimum wage increases on the volume of waged employment for the period 2009-2019. A bunching estimator, which exploits yearly changes in the hourly wage distribution due to the minimum wage hike, can be easily applied to the Korean labor market, which adopts the yearly single national minimum wage. The estimation results suggest that an increase in the annual minimum wage during the period from 2009 to 2019 had a negative effect on the volume of waged employment. A 10% increase in the (real) minimum wage leads to a 1.42~1.74% decrease in the volume of waged employment. Disemployment effects of minimum wage hikes are greater in the sector with a higher proportion of minimum wage workers. It is necessary to carefully consider disemployment effects in determining the level of the minimum wage.

• Journal of Wellbeing Management and Applied Psychology
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• v.6 no.4
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• pp.1-10
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• 2023

Purpose: As an important provision to protect the rights and interests of low-income groups, it is worth studying whether the minimum wage policy can improve the quality of life for people. Research design, data and methodology: Using data from the 2015 and 2017 China General Social Survey (CGSS), this paper employs the logit model to estimate the probability of an individual's annual income being higher than the per capita disposable income of their province. It also utilizes the DID model to analyze the impact of minimum wage increases on individuals' annual incomes. Results: The analysis reveals that an overall increase in the minimum wage raises the probability of an individual's annual income exceeding the per capita disposable income by 3%. Among them, the probability increased by 2.2% for males and by 3.2% for females. Furthermore, the impact of the minimum wage on annual income varies depending on the individual's income level. Notably, the most positive and significant impact is observed for individuals whose income level is close to the minimum wage standard. Conclusions: This provides evidence that the increase in the minimum wage has effectively improved the quality of life for the population.

• Journal of Labour Economics
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• v.39 no.2
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• pp.1-34
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• 2016

We estimate the effect of an increase in the minimum wage on employment. In Korea, there is no exogenous variation in the minimum wage across regions or industries. One single minimum wage is applied to every worker in the whole country. In this paper, we exploit arguably exogenous variation in the proportion of workers affected by the minimum wage across worker groups defined by age, sex, education, tenure and establishment size. Using the data from the Survey on Labor Conditions by Type of Employment (SLCTE) from 2006 to 2014, we find that a 1% increase in the minimum wage decreases the full-time equivalent employment by about 0.14%. The effect is heterogeneous across workers; we find the effect is more adverse for female workers, low-educated, younger and older workers, workers with a shorter tenure, and workers in small- and medium-sized establishments.

• Proceedings of the Safety Management and Science Conference
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• 2004.05a
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• pp.117-127
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• 2004

In U.S.A., minimum wage of New Jersey in April 1, 1992 rose from $4.25 to $5.05. At this assession, there was survey by 410 numbers related back and pro minimum wage in New Jersey and eastern Pennsylvania.. At stores of New Jersey and eastern Pennsylvania, comparison of the increase of employment at constant minimum wag is with estimative effect of increase of minimum wage. Through comparison of stores of low wage and high wage above $5, employment volatility in New Jersey was studied. In U.S.A., increase of minimum wage was not caused to reduce to employment. Contrary to this, result of Korea was not consisted after timing of IMF bailout of 1997. It is because drop of revenue was caused to decrease employees of part-time and full-time job at the viewpoint of cost minimization.