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Is Minimum Wage an Effective Anti-Poverty Policy in Japan?

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  • KAWAGUCHI Daiji
  • MORI Yuko

Abstract

This paper considers whether minimum wage is a well-targeted anti-poverty policy by examining the backgrounds of minimum-wage workers, and whether raising the minimum wage reduces employment for unskilled workers. An examination of micro data from a large-scale government household survey, the Employment Structure Survey (Shugyo Kozo Kihon Chosa), reveals that about half of minimum-wage workers belong to households with annual incomes of more than 5 million yen as a non-head of household. A regression analysis indicates that an increase in the minimum wage moderately reduces the employment of male teenagers and middle-aged, married females, while it encourages the employment of high school age youth.

Suggested Citation

  • KAWAGUCHI Daiji & MORI Yuko, 2009. "Is Minimum Wage an Effective Anti-Poverty Policy in Japan?," Discussion papers 09032, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:09032
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    References listed on IDEAS

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    1. Kambayashi, Ryo & Kawaguchi, Daiji & Yamada, Ken, 2013. "Minimum wage in a deflationary economy: The Japanese experience, 1994–2003," Labour Economics, Elsevier, vol. 24(C), pages 264-276.
    2. repec:eee:labchp:v:3:y:1999:i:pb:p:2101-2163 is not listed on IDEAS
    3. Brown, Charles, 1999. "Minimum wages, employment, and the distribution of income," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 32, pages 2101-2163, Elsevier.
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    8. Leigh Andrew, 2010. "Who Benefits from the Earned Income Tax Credit? Incidence among Recipients, Coworkers and Firms," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-43, May.
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    11. John Kennan, 1995. "The Elusive Effects of Minimum Wages," Journal of Economic Literature, American Economic Association, vol. 33(4), pages 1950-1965, December.
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    13. Daiji Kawaguchi & Ken Yamada, 2007. "The Impact Of The Minimum Wage On Female Employment In Japan," Contemporary Economic Policy, Western Economic Association International, vol. 25(1), pages 107-118, January.
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    Cited by:

    1. Fumio Ohtake & M. Kohara & N. Okuyama & K. Yamada, 2013. "GINI Country Report: Growing Inequalities and their Impacts in Japan," GINI Country Reports japan, AIAS, Amsterdam Institute for Advanced Labour Studies.
    2. Hara, Hiromi, 2017. "Minimum wage effects on firm-provided and worker-initiated training," Labour Economics, Elsevier, vol. 47(C), pages 149-162.
    3. HARA Hiromi, 2015. "The Effects of Minimum Wages on Training," Discussion papers 15075, Research Institute of Economy, Trade and Industry (RIETI).
    4. Abe, Yukiko, 2012. "A cohort analysis of male labor supply in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 26(1), pages 23-43.
    5. Kambayashi, Ryo & Kawaguchi, Daiji & Yamada, Ken, 2013. "Minimum wage in a deflationary economy: The Japanese experience, 1994–2003," Labour Economics, Elsevier, vol. 24(C), pages 264-276.
    6. Kawaguchi, Daiji & Mori, Yuko, 2016. "Why has wage inequality evolved so differently between Japan and the US? The role of the supply of college-educated workers," Economics of Education Review, Elsevier, vol. 52(C), pages 29-50.
    7. MORIKAWA Masayuki, 2019. "Minimum Wages and Productivity: Evidence from Japan," Policy Discussion Papers 19015, Research Institute of Economy, Trade and Industry (RIETI).
    8. Kawaguchi, Daiji & Mori, Yuko, 2021. "Estimating the effects of the minimum wage using the introduction of indexation," Journal of Economic Behavior & Organization, Elsevier, vol. 184(C), pages 388-408.
    9. Abe, Yukiko, 2011. "Regional variations in labor force behavior of women in Japan," CEI Working Paper Series 2010-12, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    10. Yamagishi, Atsushi, 2021. "Minimum wages and housing rents: Theory and evidence," Regional Science and Urban Economics, Elsevier, vol. 87(C).
    11. SATO Kazuma, 2021. "The Impact of the Minimum Wage Increase on Subjective Wellbeing: Evidence from Japan," Discussion papers 21075, Research Institute of Economy, Trade and Industry (RIETI).
    12. Okudaira, Hiroko & Takizawa, Miho & Yamanouchi, Kenta, 2019. "Minimum wage effects across heterogeneous markets," Labour Economics, Elsevier, vol. 59(C), pages 110-122.
    13. Ryo Kambayashi & Daiji Kawaguchi & Ken Yamada, 2012. "Minimum Wage in a Deflationary Economy: The Japanese Experience, 1994–2003," Working Papers 35-2012, Singapore Management University, School of Economics.

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