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Minimum Wage Changes across Provinces in China: Average Treatment Effects on Employment and Investment Decisions

Author

Listed:
  • Ji Luo

    (School of Mathematical Sciences, Nankai University, Tianjin 300071, China)

  • Daniel J. Henderson

    (School of Mathematical Sciences, Nankai University, Tianjin 300071, China
    Department of Economics, Finance and Legal Studies, University of Alabama, Tuscaloosa, AL 35487-0224, USA
    Institute for the Study of Labor, IZA, 53113 Bonn, Germany)

Abstract

We exploit data from the China Household Finance Survey to examine the impact of changes in the minimum wage on employment and investment decisions. We are able to non-parametrically identify the average treatment effect on the treated via exogenous variation in the minimum wage across provinces. We find that changes in the minimum wage had no adverse effects on employment (in terms of days worked per month or hours worked per work day) but found evidence that changes in the minimum wage impacted the percentage of families that had a bank account, a family in a rural area owned their home, and whether families (whose highest level of education was primary school) planned to purchase a home.

Suggested Citation

  • Ji Luo & Daniel J. Henderson, 2021. "Minimum Wage Changes across Provinces in China: Average Treatment Effects on Employment and Investment Decisions," JRFM, MDPI, vol. 14(1), pages 1-16, January.
    • Handle: RePEc:gam:jjrfmx:v:14:y:2021:i:1:p:22-:d:474975
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    References listed on IDEAS

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    3. Dean Karlan & Aishwarya Lakshmi Ratan & Jonathan Zinman, 2014. "Savings by and for the Poor: A Research Review and Agenda," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 60(1), pages 36-78, March.
    4. Dayong Zhang, 2016. "Understanding China from a Household’s Perspective: Studies Based on the China Household Finance Survey (CHFS)," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 52(8), pages 1725-1727, August.
    5. Juan Yang & Morley Gunderson, 2019. "Minimum wage impacts on wages, employment and hours in China," International Journal of Manpower, Emerald Group Publishing Limited, vol. 41(2), pages 207-219, October.
    6. Gitanjali Sen & Sankar De, 2018. "How Much Does Having a Bank Account Help the Poor?," Journal of Development Studies, Taylor & Francis Journals, vol. 54(9), pages 1551-1571, September.
    7. Jing Wang & Morley Gunderson, 2011. "Minimum Wage Impacts In China: Estimates From A Prespecified Research Design, 2000–2007," Contemporary Economic Policy, Western Economic Association International, vol. 29(3), pages 392-406, July.
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