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On the substitution effect of the minimum wage increase: new evidence

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  • Yu Hsing

Abstract

The impact of the minimum wage increase on the part-time/full-time employment ratio (PTFT) is re-examined. Contrary to some previous findings, strong evidence is found of the substitution effect that if the relative wage (the ratio of the minimum wage to the average hourly earning in the private sector) rises, PTFT decreases. The linear and logarithmic forms can be rejected. The partial adjustment process describes the lag response better. Real GDP growth is found to be insignificant and may be proxied by the unemployment rate for experienced workers.

Suggested Citation

  • Yu Hsing, 2000. "On the substitution effect of the minimum wage increase: new evidence," Applied Economics Letters, Taylor & Francis Journals, vol. 7(4), pages 225-228.
    • Handle: RePEc:taf:apeclt:v:7:y:2000:i:4:p:225-228
    DOI: 10.1080/135048500351555
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Robert D. Atkinson, Ph.D.: Minimum Wage/Maximum Growth
      by Robert D. Atkinson, Ph.D. in Huffington Post Business on 2013-02-22 02:20:10

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    Cited by:

    1. Bodo Aretz & Melanie Arntz & Terry Gregory, 2013. "The Minimum Wage Affects Them All: Evidence on Employment Spillovers in the Roofing Sector," German Economic Review, Verein für Socialpolitik, vol. 14(3), pages 282-315, August.
    2. Jeroen Horemans, 2016. "The part-time poverty gap across Europe: How institutions affect the way part-time and full-time workers avoid poverty differently," Working Papers 1603, Herman Deleeck Centre for Social Policy, University of Antwerp.
    3. Yonezawa, Koichi & Gómez, Miguel I. & McLaughlin, Edward W., 2022. "Impacts of Minimum Wage Increases in the US Retail Sector: Full-Time versus Part-Time Employment," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 47(2), May.

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