Minimum wage, social insurance mandate, and working hours

Ji Hwan Kim, Jungmin Lee and Kyungho Lee

Journal of Public Economics, 2023, vol. 225, issue C

Abstract: Raising the minimum wage may have unintended negative consequences for workers. In South Korea, employers are required to contribute towards their employees’ social insurance, with the amount proportional to earnings. However, workers employed for less than 60 h per month are exempt from this contribution requirement. Using administrative payroll records from 2011 to 2019, we find that raising the minimum wage results in a higher share of the exempt workers. Our results remain robust when focusing on unanticipated hikes in the minimum wage in 2018 and 2019.

Keywords: Social insurance mandate; Exempt workers; Minimum wage; Work hours; Short-time workers (search for similar items in EconPapers)
JEL-codes: J21 J23 J38 K31 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:225:y:2023:i:c:s0047272723001330

DOI: 10.1016/j.jpubeco.2023.104951

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