IDEAS home Printed from https://ideas.repec.org/p/eti/rdpsjp/13008.html
   My bibliography  Save this paper

Effects of Minimum Wages on Labor Markets and the Overall Economy: A bird's-eye view on Japanese and overseas research (Japanese)

Author

Listed:
  • TSURU Kotaro

Abstract

This paper surveys theoretical and empirical research on the effects of minimum wages in Japan and overseas and provides some implication for Japan's minimum wage policy. The debate over the minimum wage policy is often judged by its disemployment effect. In Japan, literature employing large panel data and focusing on those directly affected by minimum wages have unambiguously found the negative effects of minimum wages on employment. Policymakers need to bear a tradeoff in which some people receive higher wages while others suffer job losses. In addition, the impact on income distribution, working hours, profits, prices, and human capital as well as employment and evaluating their overall impact should be analyzed in a more comprehensive manner. Our policy recommendations are as follows. First, excessive burden on particular groups in the case of minimum wage increases must be avoided. One way is to introduce a lower level of minimum wage for teens as adopted in European countries. Second, increases in minimum wages, if any, should be moderate. Third, improved treatment of low-wage workers needs to be done via enhanced labor-management relations rather than by minimum wage increases. Finally, professional organizations such as the Low Pay Commission (LPC) in the United Kingdom that recommends minimum wage policies based on empirical evidence should be created.

Suggested Citation

  • TSURU Kotaro, 2013. "Effects of Minimum Wages on Labor Markets and the Overall Economy: A bird's-eye view on Japanese and overseas research (Japanese)," Discussion Papers (Japanese) 13008, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:rdpsjp:13008
    as

    Download full text from publisher

    File URL: https://www.rieti.go.jp/jp/publications/dp/13j008.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Castro, Lucio & Olarreaga, Marcelo & Saslavsky, Daniel, 2006. "The impact of trade with China and India on Argentina’s manufacturing employment," MPRA Paper 538, University Library of Munich, Germany.
    2. Auer, Raphael & Fischer, Andreas M., 2010. "The effect of low-wage import competition on U.S. inflationary pressure," Journal of Monetary Economics, Elsevier, pages 491-503.
    3. Joachim Wagner, 2007. "Exports and Productivity: A Survey of the Evidence from Firm-level Data," The World Economy, Wiley Blackwell, pages 60-82.
    4. Bernard, Andrew B. & Jensen, J. Bradford & Schott, Peter K., 2006. "Survival of the best fit: Exposure to low-wage countries and the (uneven) growth of U.S. manufacturing plants," Journal of International Economics, Elsevier, pages 219-237.
    5. Álvarez, Roberto & Claro, Sebastián, 2009. "David Versus Goliath: The Impact of Chinese Competition on Developing Countries," World Development, Elsevier, vol. 37(3), pages 560-571, March.
    6. Tomiura, Eiichi, 2003. "The impact of import competition on Japanese manufacturing employment," Journal of the Japanese and International Economies, Elsevier, vol. 17(2), pages 118-133, June.
    7. Maria Guadalupe & Julie M. Wulf, 2008. "The Flattening Firm and Product Market Competition: The Effect of Trade Liberalization," Harvard Business School Working Papers 09-067, Harvard Business School.
    8. Greenaway, David & Gullstrand, Joakim & Kneller, Richard, 2008. "Surviving globalisation," Journal of International Economics, Elsevier, vol. 74(2), pages 264-277, March.
    9. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    10. Anna Maria MAYDA & NAKANE Masato & STEINBERG, Chad & YAMADA Hiroyuki, 2012. "Exposure to Low-wage Country Imports and the Growth of Japanese Manufacturing Plants," Discussion papers 12038, Research Institute of Economy, Trade and Industry (RIETI).
    11. David Greenaway & Richard Kneller, 2007. "Firm heterogeneity, exporting and foreign direct investment," Economic Journal, Royal Economic Society, vol. 117(517), pages 134-161, February.
    Full references (including those not matched with items on IDEAS)

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eti:rdpsjp:13008. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (KUMAGAI, Akiko). General contact details of provider: http://edirc.repec.org/data/rietijp.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.