The effects of monthly minimum wages on the labor market

Zhengxiong Yang, Mingwei Liu, Shiwei Zhang and Chenxi Yin

China Economic Review, 2024, vol. 88, issue C

Abstract: We explore the labor market impact of monthly minimum wages utilizing a model suitable for countries adopting monthly, weekly, or daily wage benchmarks. Our findings indicate that, in the absence of overtime regulations, an increase in monthly minimum wages will increase working hours and hourly wages and increase (or decrease) employment when the firm has high (or low) monopsony power. When incorporating overtime alongside its associated compensation, the implications of monthly minimum wages become contingent on the prevailing overtime premiums. We validate these assertions using microdata from China.

Keywords: Monthly minimum wages; Labor market effects; Monopsony; Overtime premiums; China (search for similar items in EconPapers)
JEL-codes: J22 J31 J38 J61 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:chieco:v:88:y:2024:i:c:s1043951x24001998

DOI: 10.1016/j.chieco.2024.102310

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