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Minimum wage and labor disputes: Evidence from China

Author

Listed:
  • Zhu, Ling
  • Xiang, Genben
  • Sheng, Yan
  • Chen, Xiaoyu

Abstract

This study examines the effect of minimum wage policies on labor disputes. Leveraging regional and temporal variation in minimum wage rates across Chinese cities, we establish that wage increases significantly elevate the incidence of labor disputes. Our analysis reveals that minimum wage regulations predominantly intensify disputes motivated by claims for unpaid wages and severance compensation. We identify involuntary unemployment induced by upward wage adjustments as the primary mechanism driving heightened labor unrest. Heterogeneity analyses indicate that these effects are stronger in tertiary industries and regions with advanced digital economies, greater innovation intensity, and higher concentrations of low-skilled workers. These findings yield policy implications for labor market governance in developing economies.

Suggested Citation

  • Zhu, Ling & Xiang, Genben & Sheng, Yan & Chen, Xiaoyu, 2026. "Minimum wage and labor disputes: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 89(C), pages 1045-1063.
    • Handle: RePEc:eee:ecanpo:v:89:y:2026:i:c:p:1045-1063
    DOI: 10.1016/j.eap.2026.01.006
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