MINIMUM WAGE IMPACTS IN CHINA: ESTIMATES FROM A PRESPECIFIED RESEARCH DESIGN, 2000-2007

Abstract

We use a prespecified research design to estimate the employment effect of minimum wages in China over the period 2000 to 2007. Our results are consistent with theoretical expectations and institutional realities of Chinese labor markets. These include: negative employment effects in slower growing regions; larger negative effects in non-state-owned organizations that tend to be more responsive to market pressures; much larger lagged effects reflecting the time needed for adjustments to occur; no adverse employment effects in the prosperous and growing Eastern region; and a positive employment effect in state-owned enterprises in the East—consistent with monopsonistic behavior. (JEL J38)

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