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Title:The minimum wage in a deflationary economy: The Japanese experience, 1994 - 2003 PDF Logo
Authors:Kambayashi, Ryo
Kawaguchi, Daiji
Yamada, Ken
Issue Date:2010
Series/Report no.:Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 4949
Abstract:The statutory minimum wage has steadily increased for decades in Japan, while the median wage has fallen nominally since 1999 because of a severe recession. We use large micro-data sets from two government surveys to investigate how the minimum wage has affected the wage distribution under unusual circumstances of deflation. The compression of the lower tail of the female wage distribution is largely explained by an increased real value of the minimum wage. Steady increases in the effective minimum wage reduced employment among low-skilled, middle-aged female workers, but the mechanical effect associated with disemployment on wage compression was minimal.
Subjects:Minimum wage
wage distribution
wage inequality
employment
deflation
JEL:J23
J31
J38
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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