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How Do Minimum Wage Adjustments Affect Wages In China: Evidence Based On Administrative Personal Income Tax Data

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  • Langchuan Peng
  • Xiaxin Wang
  • Daixin He

Abstract

By using unique administrative personal income tax data covering the population of a middle‐sized Chinese city from 2009 to 2013, we explore how minimum wage adjustments affect wages of low‐wage workers. The empirical evidence documented in this paper suggests a unique pattern of minimum wage regulation: while it permits wages to stay below the prevailing minimum wage threshold temporarily, it does encourage a higher growth rate for wages below the threshold. Overall, such a pattern might help lessen any downward pressures on employment, while ensuring that low‐wage earners gradually get better off over time. (JEL J3, J6, P5)

Suggested Citation

  • Langchuan Peng & Xiaxin Wang & Daixin He, 2019. "How Do Minimum Wage Adjustments Affect Wages In China: Evidence Based On Administrative Personal Income Tax Data," Contemporary Economic Policy, Western Economic Association International, vol. 37(2), pages 349-365, April.
  • Handle: RePEc:bla:coecpo:v:37:y:2019:i:2:p:349-365
    DOI: 10.1111/coep.12413
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • P5 - Economic Systems - - Comparative Economic Systems

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