Estimating the Effects of the Minimum Wage Using the Introduction of Indexation

Daiji Kawaguchi and Yuko Mori

Discussion papers from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: We examine the impacts of the minimum wage on employment using the minimum wage hike induced by the introduction of indexation of the local minimum wage to the local cost of living. The revision of the Minimum Wage Act in 2007 of Japan essentially required the government to set the minimum wage indexed to the local cost of living with a five-year moratorium period. The government subsequently increased the minimum wage in areas where the cost of living was high relative to the local minimum wage. We find that minimum-wage hikes raised the wages of low-wage workers, but reduced the employment of young, less-educated men. A panel analysis based on matched Labour Force Survey data indicates that the minimum-wage hike decreased the job flows of prime-age men and women.

Pages: 47 pages
Date: 2021-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.rieti.go.jp/jp/publications/dp/21e007.pdf (application/pdf)

Related works:
Journal Article: Estimating the effects of the minimum wage using the introduction of indexation (2021)
Working Paper: Estimating the Effects of the Minimum Wage Using the Introduction of Indexation (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eti:dpaper:21007

Access Statistics for this paper

More papers in Discussion papers from Research Institute of Economy, Trade and Industry (RIETI) Contact information at EDIRC.
Bibliographic data for series maintained by TANIMOTO, Toko ().