The Minimum Wage in a Deflationary Economy: The Japanese Experience, 1994-2003
AbstractThe statutory minimum wage has steadily increased for decades in Japan, while the median wage has fallen nominally since 1999 because of a severe recession. We use large micro-data sets from two government surveys to investigate how the minimum wage has affected the wage distribution under unusual circumstances of deflation. The compression of the lower tail of the female wage distribution is largely explained by an increased real value of the minimum wage. Steady increases in the effective minimum wage reduced employment among low-skilled, middle-aged female workers, but the mechanical effect associated with disemployment on wage compression was minimal.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4949.
Length: 44 pages
Date of creation: May 2010
Date of revision:
Publication status: published in: Labour Economics, 2013, 24, 264-276
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Other versions of this item:
- Ryo Kambayashi & Daiji Kawaguchi & Ken Yamada, 2009. "The Minimum Wage in a Deflationary Economy: The Japanese Experience, 1994|2003," Global COE Hi-Stat Discussion Paper Series gd09-074, Institute of Economic Research, Hitotsubashi University.
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-18 (All new papers)
- NEP-LAB-2010-06-18 (Labour Economics)
- NEP-SEA-2010-06-18 (South East Asia)
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- Chie Aoyagi & Giovanni Ganelli, 2013. "The Path to Higher Growth: Does Revamping Japanâ€™s Dual Labor Market Matter?," IMF Working Papers 13/202, International Monetary Fund.
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