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Minimum wage impacts on Han-minority Workers’ wage distribution and inequality in urban china

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  • Howell, Anthony

Abstract

This paper examines the distributional impacts of the minimum wage on the urban wages of Han-minority workers and the implications for urban inequality. County-level minimum wage data is combined with recent proprietary household survey data representative of China’s ethnically diverse areas. The identification strategy relies on an unconditional quantile regression framework that takes into account policy endogeneity using an instrument variable approach. The findings show that minimum wages lead to wage compression along the bottom and middle parts of the urban wage distribution. The minimum wage effects are larger for lower-skilled workers located in ethnic minority counties or that belong to an ethnic minority group. Counterfactual analysis further shows that minimum wages help to significantly reduce aggregate urban wage inequality: increasing minimum wages from a counterfactual benchmark to their observed levels, an average increase of 26%, reduces the Gini coefficient of wages by 10–12%.

Suggested Citation

  • Howell, Anthony, 2020. "Minimum wage impacts on Han-minority Workers’ wage distribution and inequality in urban china," Journal of Urban Economics, Elsevier, vol. 115(C).
    • Handle: RePEc:eee:juecon:v:115:y:2020:i:c:s0094119019300531
    DOI: 10.1016/j.jue.2019.103184
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    Cited by:

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    3. Liu, Guangqiang & Lv, Lingli, 2022. "Government regulation on corporate compensation and innovation: Evidence from China's minimum wage policy," Finance Research Letters, Elsevier, vol. 50(C).
    4. Kelly Z. Peng & Fang Lee Cooke & Xuhua Wei, 2023. "Managing minority employees in organizations in Asia Pacific: Towards a more inclusive workplace?," Asia Pacific Journal of Management, Springer, vol. 40(3), pages 877-902, September.
    5. Iwasaki, Ichiro & Ma, Xinxin, 2020. "Gender Wage Gap in China: A Large Meta-Analysis," CEI Research Paper Series 2020-5, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    6. Ma, Shuang & Li, Xuan & Wu, Xi, 2024. "Minimum wage and internal labor migration: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 226(C).
    7. Cut Risya Varlitya & Raja Masbar & Abd. Jamal & Muhammad Nasir, 2023. "Do Regional Macroeconomics Variables Influence the Income Inequality in Indonesia?," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 1, pages 180-199.
    8. Acquah-Sarpong, Richard, 2025. "The impact of regionally tiered minimum wage on firms' credit default," 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO 361113, Agricultural and Applied Economics Association.
    9. Xinxin Ma & Ichiro Iwasaki, 2021. "Does communist party membership bring a wage premium in China? a meta-analysis," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 19(1), pages 55-94, January.
    10. Ichiro Iwasaki & Xinxin Ma, 2020. "Gender wage gap in China: a large meta-analysis," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 54(1), pages 1-19, December.
    11. Kong, Dongmin & Qin, Ni & Xiang, Junyi, 2021. "Minimum wage and entrepreneurship: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 320-336.
    12. Qianqian Yang & Nobuaki Hamaguchi, 2025. "Revisiting Minimum Wage: From Labor Economics to Spatial Economics," Discussion Paper Series DP2025-08, Research Institute for Economics & Business Administration, Kobe University.
    13. Qianqian Yang & Nobuaki Hamaguchi, 2025. "Minimum Wage in China," Discussion Paper Series DP2025-10, Research Institute for Economics & Business Administration, Kobe University.
    14. Bai, Yihong & Li, Qiaoge & Liu, Qian & Veall, Michael R., 2024. "Chinese minimum wages and health," Social Science & Medicine, Elsevier, vol. 363(C).
    15. Yuko MORI & Hiroko OKUDAIRA, 2025. "Higher Minimum Wage, Stagnant Income? The case of women's work hours in Japan," Discussion papers 25042, Research Institute of Economy, Trade and Industry (RIETI).

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    Keywords

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    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J15 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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