The Minimum Wage in a Deflationary Economy: The Japanese Experience, 1994 |2003

Ryo Kambayashi (), Daiji Kawaguchi and Ken Yamada

Global COE Hi-Stat Discussion Paper Series from Institute of Economic Research, Hitotsubashi University

Abstract: The median wage in Japan has fallen nominally since 1999 due to a severe recession, while the statutory minimum wage has steadily increased over the same period. We used large micro-data sets from two government surveys to investigate how the minimum wage has affected wage distribution under the unusual circumstances of deflation. The compression of the lower tail of female wage distribution was almost completely explained by the increased real value of the minimum wage. The steady increases in the effective minimum wage reduced employment among low-skilled, young and middle-aged female workers, but the mechanical effect associated with disemployment on wage compression was minimal. These results held even after controlling for composition effects. The minimum wage contributed to the reduction in the pay gap between full-time and part-time workers.

Keywords: Minimum Wage; Wage Distribution; Wage Inequality; Employment; Deflation (search for similar items in EconPapers)
JEL-codes: J23 J31 J38 (search for similar items in EconPapers)
Date: 2009-06
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Minimum wage in a deflationary economy: The Japanese experience, 1994–2003 (2013)
Working Paper: Minimum Wage in a Deflationary Economy: The Japanese Experience, 1994–2003 (2013)
Working Paper: The Minimum Wage in a Deflationary Economy: The Japanese Experience, 1994-2003 (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hst:ghsdps:gd09-074

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