Effects Of Minimum Wage Research Articles

PENGARUH UPAH MINIMUM, TINGKAT PENDIDIKAN DAN USIA TERHADAP PENYERAPAN TENAGA KERJA DI JAWA TIMUR TAHUN 2017-2021

The objective of this research is to discuss and analyze the effect of minimum wage, education level and age on labor force absorption in 38 regencies and cities in East Java. A 2017-2021 data was examined using Fixed Effect Model. The results of the analysis indicate that Municipal Minimum Wage negatively and significantly influences the labor absorption in regencies and cities in East Java, that age positively and significantly influence the labor absorption in regencies and cities in East Java, and that education level negatively but insignificantly impacts the labor absorption in regencies and cities in East Java.

The Effect of State Minimum Wage Increases on CEO Compensation: Evidence of Labor Donation in Nonprofit Organizations

ABSTRACT In this paper, we test the “labor donation” hypothesis, which posits that intrinsically motivated individuals willingly accept lower compensation to work in nonprofit organizations (NPOs). We do so by examining the response of NPO CEO compensation to exogeneous increases in labor costs resulting from state-level minimum wage hikes, finding these increases are followed by declines in CEO compensation. Consistent with the labor donation hypothesis, we find the declines in compensation are larger for CEOs who we expect to have greater intrinsic motivation, i.e., those whose NPOs are headquartered in counties with higher levels of religiosity, in counties with greater levels of social capital, and those who work for a local NPO as opposed to a national NPO. In contrast to the decline in compensation we observe for NPO CEOs, we do not find an impact on for-profit CEO compensation. JEL Classifications: G3; J33; J38; L3; L3.

Chinese Minimum Wages and Health

Variation in the timing of changes in the minimum wage across provinces in China is exploited using individual/household longitudinal survey data from 2010 to 2018 to examine potential health effects on working age individuals in households that are likely affected by minimum wages. Minimum wage increases are estimated to improve self-reported health particularly by reducing the incidence of self-reported overall poor health. There is also reasonably strong evidence that they reduce unhappiness and lower dissatisfaction with less robust evidence that they improve mental health and lower recent discomfort. Importantly, there is a type of “dose-response” effect: the estimates indicate no health effects of minimum wage increases on those in households likely not affected financially by the minimum wage with health effects increasing the more likely the household is financially affected. The results are driven by the findings for males.

Is a single minimum wage policy viable option? Evidence from the impact of minimum wage on youth employment in Malaysia

The present study is aimed to identify an ideal mechanism to reduce negative effect of minimum wage on youth employment generation. Using available data from Department of Statistics, the study runs an annual panel regression at the state level based on fixed effect specification model. The finding demonstrates that the minimum wage has a negative effect on employment, particularly among youth. It implies that there is an excess of labour supply in the market at the current wage rate. As a result, the rate set is higher than equilibrium, signifying firm disadvantages. The negative effect is more prevalent if the single national minimum wage rate policy is applied to all states. Therefore, the national wage policy should be thoroughly examined. Instead, a regional wage rate should be explored as a potential solution for mitigating and preventing negative employment effects.

Can minimum wage increases narrow the gender wage gap? Evidence from China

ABSTRACT Using data from the 2011–2019 China Household Finance Survey (CHFS), this paper examines the effect of minimum wage increases on the gender wage gap. The results show that minimum wage increases can significantly reduce the gender wage gap. We further examine the impact of minimum wages on the gender wage gap across the wage distribution and find that minimum wages are conducive to narrowing the gender wage gap at the bottom and middle parts of the wage distribution, but not conducive to reducing the gender wage gap at the upper part of the wage distribution. We also identity heterogeneous effects of minimum wages on the gender wage gap across age, education level, hukou, and work unit. Finally, we find that minimum wages have a negative effect on low-wage workers’ employment. Therefore, governments need to weigh their role in reducing the gender wage gap against the potential negative employment effects when adjusting the minimum wage standard.

The effect of minimum wage increases on the labor productivity of star-rated hotels: evidence from China

The effect of minimum wage increases on the labor productivity of star-rated hotels: evidence from China

Inflation’s Reduction of the Real Minimum Wage and Unemployment in the USA: 1987 to 2021

<p class="MsoNormal" style="margin-top: 12pt; text-align: justify;"><span lang="EN-US" style="font-family: 'times new roman', times, serif; font-size: 14pt;">Hundreds of articles have been written that include empirical estimates of the dis-employment effects of minimum wages; however, many of these articles find statistically insignificant effects, some find significant negative effects, and a few find significant positive effects. Most of these studies use multivariate analyses which can be criticized for omitting key variables. The omitted variables problem ruins all statistics and estimates. This paper uses reiterative truncated projected least squares (RTPLS), a solution to the omitted variables problem, to estimate the percentage increase in unemployment due to a one percent increase in the real minimum wage using monthly data for the 50 states of the USA from 1987 to 2021. RTPLS produces a separate elasticity for every observation where differences in these estimates are due to omitted variables. We argue that RTPLS solves most of the econometric problems that David Neumark identified in his keynote address at a minimum wage conference in Berlin in 2018. We find that the percentage change in the unemployment rate due to a one percent change in the minimum wage ranges between 1.156 and 3.389, that the elasticities for different states tend to move together over time, and that all these elasticities are statistically significant at a 95 percent confidence level.</span></p>

Designing an Effective Minimum Wage Policy for Sustainable Development in India

The articulated objectives of the minimum wage policy in India—specifically targeting poverty alleviation, reducing income inequality, promoting gender equity, and encouraging responsible consumption—are fundamentally aligned with the broader principles of the Sustainable Development Goals (SDGs). These policy goals, if effectively implemented, have the potential to make substantial contributions toward the achievement of multiple SDGs, particularly those related to ending poverty (SDG 1), reducing inequalities (SDG 10), promoting gender equality (SDG 5), and ensuring decent work and economic growth (SDG 8). However, the complex structure of minimum wages in India poses several challenges to achieving these outcomes. Among these challenges, we specifically discuss partial coverage, low rates of minimum wage fixation and a high incidence of noncompliance. The limited coverage undermines the effectiveness of minimum wage policies as a tool for poverty reduction and income redistribution. Noncompliance not only denies workers their rightful earnings but also perpetuates cycles of poverty and inequality. It particularly affects vulnerable groups, such as women and rural workers, who are more likely to be employed in sectors with weak enforcement of wage standards. By surveying some recent empirical literature, we identify the significance of minimum wages in mitigating poverty, income inequality and promoting gender equality and decent work. Literature from India suggests that minimum wages if implemented with full compliance would reduce poverty by 7-10 percent and gender wage gap up to 18 percent. Further, we elaborate briefly on strengthening the minimum wages. Universalising the legal coverage of minimum wages is the first step towards an effective minimum wage policy. Fixing adequate levels of minimum wages and then revising them from time to time with inflation indexing is the next important step. Lastly we argue that enabling a conducive environment for firms; compliance is the most crucial. This paper is intended to stimulate further discussion and reflection on the vital role that minimum wage policies can play in advancing the SDGs in India. By linking minimum wages more explicitly to the SDGs, policymakers can develop more integrated and effective strategies to tackle poverty, reduce inequality, and promote sustainable economic growth. The goal is to ensure that minimum wages not only provide a safety net for workers but also contribute to broader social and economic development objectives.

Identifikasi Pengaruh Investasi Sektor Industri dan Upah Minimum Provinsi terhadap Penyerapan Tenaga Kerja Industrial di Provinsi Jambi

This research aims to analyze the effect of investment and minimum wages on labor absorption in the industrial sector in Jambi Province. The analytical tool used is multiple linear regression. The research results show that simultaneously investment and the minimum wage together have a significant effect on labor absorption. Then, partially, investment and minimum wage variables have a significant effect on labor absorption.

The effect of minimum wages on self-reported physical and mental health in China

We exploit provincial variation in minimum wages allowed by the 2004 Chinese regulation to study the impact of minimum wages on the health of workers. We use data from Wave 1 of the World Health Organization's Study on Global Aging and Adult Health (SAGE) conducted in 2007–2010. We consider measures of self-reported health in ten domains and a measure of general health obtained from a factor analysis as dependent variables when estimating ordered probit models and linear models, respectively. We find that real minimum wages have a small, but not negligible, negative effect on most of the health outcomes and general health. The result is robust to several controls, including reporting heterogeneity. The negative effect on health is driven by the deterioration of working conditions, due to the increase in the number of days worked per week for public and private employees.

Effects of the Minimum Wage (MW) on Income Inequality: Systematic Review and Analysis of the Spanish Case

The minimum wage has become a standard measure in the economic and social policies of countries all over the world. The primary objective of this measure is to guarantee that workers receive a minimum wage that allows them to lead a decent life, thereby reducing inequality and poverty. However, studies on the minimum wage have not focused on assessing the effects on these dimensions but only on employment. The objective of this study is to address this research gap by analysing the effects of minimum wage increases on income inequality and poverty. To this end, firstly, a systematic review of the empirical analyses was conducted using the PRISMA methodology, with a view to ensuring that all empirical evidence was available. Secondly, the Spanish case was examined. The significant increase in minimum wage in Spain in 2019 (21.3% in real terms) presents an invaluable opportunity to utilise this event as a natural experiment to generate new evidence. A difference-in-differences approach was employed to assess the impact of this phenomenon in the period 2018–2019 with microdata from European Statistics on Income and Living Conditions (EU-SILC for Spain). In doing so, two basic scientific contributions were made. The first one, a systematic, exhaustive, and up-to-date literature review (up to June 2024), as there is, to our knowledge, no recent systematic review of this relationship (minimum wage vs. inequality). The available evidence indicates a clear inverse relationship between the minimum wage and inequalities and poverty. The second one, regarding the Spanish case, there has been a dearth of scientific studies on this subject. Thus, this paper provides new scientific evidence demonstrating that a significant increase in the minimum wage can significantly improve the income of low-wage earners, thereby reducing income inequality and in-work poverty. Furthermore, there is evidence of a spillover effect towards income groups closer to the treatment group.

The politics of the minimum wage: Explaining introduction and levels

AbstractThere is much economics research on the effects of minimum wages, but little research on their politics. Yet, ever more advanced capitalist democracies have introduced minimum wages, and the setting of minimum wage levels has become increasingly politicized. This article is the first comprehensive study of the politics of the minimum wage: We analyse the determinants of adopting minimum wages as well as what explains variation in their levels over time, based on a dataset of 33 OECD countries from 1960 to 2017. We find that the decline in collective bargaining is the main driving force behind the introduction of ever more minimum wages. At the same time, left‐wing parties in government are most likely to adopt a minimum wage when bargaining coverage is low. Left governments are also associated with higher minimum wages, especially when the government has full control over level‐setting.

Effects of the German Minimum Wage on Earnings and Working Time Using Establishment Data

Abstract This study examines the short-term effects of the introduction of a statutory minimum wage in Germany on hourly wages, monthly wages and paid working hours. We exploit a novel panel dataset by linking the Structure of Earnings Survey (SES) 2014 and the Earnings Survey (ES) 2015 and apply a difference-in-differences approach at the establishment level. The results indicate an effect of the introduction of the statutory minimum wage on the average hourly wages of employees in minimum wage establishments of up to 5.9 %. Due to negative effects on average working time of approximately minus 3.1 %, the effects on monthly gross earnings are smaller but still amount to up to 2.7 % on average. The results further suggest that the minimum wage effects on earnings were greater among low-wage employees than on average, in eastern Germany than in western Germany, and among part-time employees and marginal employees than among full-time employees.

Determinants of Unemployment: Empirical Evidence from Indonesia

Indonesia faces the challenge of a rapidly increasing labor force that is not proportional to the number of jobs available, resulting in unemployment. This study examines the effect of economic growth, inflation, and minimum wage on unemployment in 34 provinces in Indonesia from 2018 to 2022. This research uses secondary data from the Central Bureau of Statistics and Bank Indonesia. The data processing method uses panel data regression with the Fixed Effect model. The results of the analysis show that economic growth and inflation have a negative and significant relationship with unemployment in Indonesia. In contrast, the provincial minimum wage has a positive and significant relationship with unemployment in Indonesia.

DETERMINAN PENYERAPAN TENAGA KERJA DI KOTA MALANG SEBELUM DAN SAAT PANDEMI COVID-19

One of the labor problems in Malang City is that the available jobs cannot absorb the rapidly growing labor force, causing high unemployment. The purpose of this study is to determine the effect of minimum wage, GRDP, inflation, education and COVID-19 dummy variables on labor deployment in Malang City. Data analysis uses multiple linear regression methods with the Stata 14 program. The data used are time series from 1993-2022 in Malang City. The results showed that the minimum wage has a positive and significant effect on labor absorption. Education level has a significant and negative effect on labor absorption. GRDP and Inflation have no significant effect on labor absorption. For COVID-19 dummy on employment, it has a negative and insignificant effect during the COVID-19 pandemic

Minimum Wage, Inflation, Interest Rate and Household Consumption In Indonesia

This study aims to determine the effect of minimum wages, inflation, and lending rates on household consumption in Indonesia. The variables in this study are minimum wage, inflation, and lending rates as independent variables, while the household consumption variable is the dependent variable. The research period is from 1993-2023. The data analysis technique used is the Autoregressive Distributed Lag (ARDL) panel. The results of this study indicate that the province that is able to become a leading indicator for the stability of household consumption is North Sumatra. When viewed from the short run and long run, the Minimum Wage variable has an insignificant effect on Household Consumption in the short term but has a significant effect on Household Consumption in the long term. Inflation variable has a significant effect on Household Consumption in the short run, while in the long run Inflation variable has an insignificant effect on Household Consumption. The loan interest rate variable has no significant effect on household consumption in the short term or in the long term.

The Effects of Minimum Wage, SMEs, and Investment on Employment Absorption

The Effects of Minimum Wage, SMEs, and Investment on Employment Absorption

Determinasi Pertumbuhan Ekonomi dan Upah Minimum Terhadap Penyerapan Tenaga Kerja di Tulungagung

The purpose of this study is to determine the effect of economic growth and minimum wage on employment in Tulungagung from 2008-2022. This research is descriptive quantitative type, using multiple linear regression analysis and the data used are secondary data of ADHK GRDP, district minimum wage, and working population of Tulungagung obtained from the Tulungagung Central Statistics Agency (BPS). The results showed that the Economic Growth variable had a partially significant negative effect on employment in Tulungagung Regency with T value < T table (-5,213 < 1.782) and significant 0,000 < 0,05. Minimum Wage variable had a partially significant positive effect on employment in Tulungagung Regency with T value > T table (5,830 > 1.782) and significant 0,000 < 0,05. Meanwhile, Economic Growth and Minimum Wage simultaneously have a positive and significant effect on Labor absorption in Tulungagung Regency with F value > F table (17,003 > 3,89) and significant 0,000 < 0,05.

Market power, randomization and regulation

This paper provides an introduction to and overview of the mechanism design approach to textbook monopoly and monopsony pricing problems. Specifically, assuming that agents are privately informed about their values and costs, it shows that the optimal selling and procurement mechanisms quite generally involve rationing, provided the underlying mechanism design problem does not satisfy the regularity assumption of Myerson (1981). Rationing takes the form of underpricing in the case of a monopoly seller and of involuntary unemployment and efficiency wages in the case of a monopsony employer. The paper illustrates these phenomena, as well as the effects of price ceilings and minimum wages, with a leading example that permits closed-form solutions. It also explains why resale tends to undermine the firm's benefits from rationing without eliminating them and discusses emerging issues for the theory of regulation.

Minimum wages and household income distribution: Evidence from China

AbstractBased on the 2004–2015 China Health and Nutrition Survey (CHNS) data, this article examines the effect of minimum wages on household income distribution. The results show that minimum wage increases significantly reduce the probability of per capita household net income falling below the poverty threshold, indicating that minimum wage can play a role in poverty reduction. Furthermore, we find that minimum wages significantly reduce the probability of per capita household income being 0–3 times lower than the poverty threshold, but have little effect on households with per capita net income more than 3 times the poverty threshold, which means that minimum wage increases can reduce household income inequality. We also find heterogeneous effects of minimum wage increases on household income distribution across gender, education, hukou, and age of household heads. Finally, we show that minimum wage increases play a role in regulating household income distribution by increasing the wages of employed individuals in households.