Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/304292 
Year of Publication: 
2024
Series/Report no.: 
GLO Discussion Paper No. 1504
Publisher: 
Global Labor Organization (GLO), Essen
Abstract: 
Local labour market concentration may influence firms' employment responses to minimum wages. We evaluate this hypothesis using comprehensive 1998-2007 data on China's manufacturing sector and about 1,400 hand-collected county-level minimum wages. We find that, consistently with monopsony views, the negative effects of minimum wages on employment are reduced when labour market concentration is higher. We also find positive employment effects of minimum wages, but only in some specifications and in highly concentrated labour markets (representing a relatively small share of employment). Firms' training provision is also harmed less by minimum wages in more concentrated local markets. Our findings highlight the heterogeneity of policy impacts across local labour markets.
Subjects: 
Minimum wages
labour market concentration
employment
monopsony
training
JEL: 
J31
J38
J42
Document Type: 
Working Paper

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