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Falling into Poverty or Escaping from it? The Effect of the Minimum Wage in Urban China

Author

Listed:
  • Sylvie Démurger

    (CERGIC - Center for Economic Research on Governance, Inequality and Conflict - ENS de Lyon - École normale supérieure de Lyon - Université de Lyon)

  • Carl Lin

    (Bucknell University)

  • Achim D. Schmillen

    (BM = WB - La Banque Mondiale = The World Bank - WBG = GBM - World Bank Group = Groupe Banque Mondiale)

  • Dewen Wang

    (BM = WB - La Banque Mondiale = The World Bank - WBG = GBM - World Bank Group = Groupe Banque Mondiale)

Abstract

Minimum wages are found to have an inconclusive impact on poverty. Using China's individual-level panel dataset combined with county-level minimum wages, our paper shows that minimum wages have a moderate yet sustained effect on poverty reduction. The results show a two-sided effect: higher minimum wages help pull some workers out of poverty, while simultaneously pushing others in. This dynamic of larger "pulling" effects being counterbalanced by smaller "pushing" effects explains why existing studies often find that minimum wages have a negligible or minimal impact on poverty reduction. Notably, the poverty reduction effect is most pronounced for female workers.

Suggested Citation

  • Sylvie Démurger & Carl Lin & Achim D. Schmillen & Dewen Wang, 2025. "Falling into Poverty or Escaping from it? The Effect of the Minimum Wage in Urban China," Working Papers hal-05035416, HAL.
    • Handle: RePEc:hal:wpaper:hal-05035416
    Note: View the original document on HAL open archive server: https://hal.science/hal-05035416v1
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    Keywords

    Minimum wages; Poverty; China;
    All these keywords.

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