The Consumption Response to Minimum Wages: Evidence from Chinese Households

Harald Hau, Dautović, Ernest and Yi Huang
Authors registered in the RePEc Author Service: Ernest Dautović

No 12057, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper evaluates the Chinese minimum wage policy for the period 2002-2009 in terms of its impact on low income household consumption. Using a representative household panel, we fi nd support for the permanent income hypothesis, whereby unanticipated and persistent income increases due to minimum wage policy change are fully spent. The impact is driven by households with at least one child. We infer signifi cant positive welfare effects for low income households based on expenditure increases concentrated in health care and education, whereas a negative employment effect of higher minimum wage cannot be con firmed.

Keywords: Minimum wage; Labor income; Household consumption; Permanent income hypothesis (search for similar items in EconPapers)
JEL-codes: C26 E24 J38 (search for similar items in EconPapers)
Date: 2017-05
New Economics Papers: this item is included in nep-lma, nep-mac and nep-tra
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Consumption response to minimum wages: evidence from Chinese households (2019)
Working Paper: The Consumption Response to Minimum Wages: Evidence from Chinese Households (2017)
Working Paper: The Consumption Response to Minimum Wages: Evidence from Chinese Households (2017)
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