Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/316575 
Year of Publication: 
2020
Citation: 
[Journal:] East Asian Economic Review (EAER) [ISSN:] 2508-1667 [Volume:] 24 [Issue:] 3 [Year:] 2020 [Pages:] 253-273
Publisher: 
Korea Institute for International Economic Policy (KIEP), Sejong-si
Abstract: 
This paper investigates the impact of the effective minimum wage, defined as the log difference between the minimum and the median wages, on wage inequalities in the OECD countries. Unlike the previous studies that focus on single countries in which the minimum wage has no cross-sectional variation and rely instead on within-country variations of wage distribution across regions or socio-economic characteristics, we use a country panel that allows for both cross-sectional and time-series variations in minimum wage. We also control for more factors than in the previous studies whose absence may cause endogeneity. Our results confirm the previous findings that increases in minimum wage alleviate the wage inequality at the lower tail of the wage distribution, while having little effect at the upper tail. The estimated effect is larger for women than for men, which is consistent with the fact that the share of workers who are directly affected by the changes in minimum wage is bigger among women than men. An application of the IVs of Autor, Manning and Smith (2016) supports the robustness of our findings.
Subjects: 
Minimum Wage
Wage Inequality
Effective Minimum Wage
Labor Demand
Labor Supply
JEL: 
J23
J31
J38
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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