The Effects Of Minimum Wages On The Wages Of Rural Migrant Workers

For a long time,the research of minimum wage is based on the theory of hourly minimum wage.However,the labor market in China mainly applies the monthly minimum wages.In China's institutional context,the mechanism through which minimum wages exerts its impact on the wages and other labor market outcomes may follow its unique laws.After a review of the theoretical and empirical studies on the minimum wage,the dissertation examines both the micro-level individual data and micro-econometric methods,and investigates the impact of the minimum wages on the wages of rural migrant workers from the theoretical and empirical perspectives.First of all,this dissertation establishes a theory of monthly minimum wages,and applies it to analyze the impact of monthly minimum wages on the monthly wages,hourly wage,working hours and level of employment in the labor market.This dissertation then uses the Pearl River Delta survey data in China to test some of the theoretical hypotheses proposed in the model.The results show that without the consideration of overtime regulations,an increase in monthly minimum wages will increase the working hours,hourly wage and monthly wages.Its impact on employment,however,depends on the firm's monopsony power.Specifically,monthly minimum wages will increase the level of employment when firm has higher level of monopsony power,whereas it will reduce the level of employment when firm has lower level of monopsony power.Besides,the introduction of the overtime pay regulations has an important impact on the labor market effects of the monthly minimum wages.Theoretical analysis indicates that the increase of minimum wages under the high overtime pay premium will result in a reduction of workers' overtime hours.However,due to the poor implementation of overtime pay regulations,the empirical results indicate that the increase of monthly minimum wages instead aggravates the overload of rural migrant workers.In terms of employment,the implementation of overtime pay regulations has a positive effect on the employment elasticity of the monthly minimum wages.Therefore,in the process of setting,implementing and evaluating the monthly minimum wages,the government should carefully evaluate the constraint change brought by the monthly minimum wages,and take factors such as working hours and overtime pay regulations into consideration.Secondly,from the perspective of wage structure,this dissertation discusses the mechanism through which minimum wages impacts wages.Based on the data of Pearl River Delta and Yangtze River survey and China Migrants Dynamic Survey,this dissertation then examines the impact ofminimum wages on the wages of rural migrant workers with different wage structures.The results indicate that China's minimum wages impacts not only low-wage workers,but also rural migrant workers who workers in higher-wage occupations.Specifically,the minimum wages not only has a significant positive effect on the low-wages service workers,but also has a significant positive effect on the wages of high-wage production workers through overtime pay.The findings extend the understanding of how groups are affected by the minimum wages and the spillover effects of the minimum wages.Thus,the evaluation of wage structure should be emphasized when the effects of China's monthly minimum wages are analyzed.Thirdly,motivated by the fact that most rural migrant workers are involved in the informal employment,this dissertation establishes and applies the employment choice equation to investigate the impact of minimum wages on the employment choice of rural migrant workers.Through establishing wage equations,which corrected the employment selection bias,this dissertation investigates the impact of minimum wages on the wages of formal and informal workers.Besides,this dissertation has adopted a cross-over research design for robustness testing,which allows the placebo test when most provinces adjust their minimum wages standards frequently.The results indicate that the increase of minimum wages has a significant negative effect on the informal employment of low-skilled migrant workers,and a significant positive effect on the informal employment of high-skilled migrant workers.Compared with informal employment,the increase of minimum wages tends to increase the probability that migrant workers choose formal employment.The increase of minimum wages has a significant positive impact on the wages of the formal and informal rural migrant workers,with larger impact on the informal rural migrant workers.These findings negate the applicability of the two-sector model in the Chinese labor market and supports the inference that the minimum wages in China has a lighthouse effect.Furthermore,this dissertation moves from a static research perspective to a dynamic one,and applies the dynamic difference-in-difference model to analyze the short-term and long-term effects of the minimum wages on the wages of rural migrant workers.Because there is frequent adjustment of the minimum wages in various provinces,this dissertation constructed control group within each province to ensure the feasibility of the placebo test and the credibility of the study.Results indicate that the wage effect of minimum wages has a dynamic feature.The increase of minimum wages has a significant positive impact on rural migrant workers' wages in the short term.However,its positive impact on rural migrant workers declines gradually over time and becomes insignificant in the long term.Through analyzing different occupations,age groups,and skills groups,this dissertation finds that such an impact becomes more significant and its effect last longer when the initial level of migrant workers' wage is lower.Through analyzing minimum wages standards by provinces,this dissertation finds that such wage effects are stronger and last longer when incrementof the minimum wages is larger.Therefore,government should fully consider the dynamic feature of the minimum wages' effects and ensure the adjustment frequency of the minimum wages standard,which will thus contribute to the consistent increment of migrant workers' wages.Finally,this dissertation extends the discussion from the average treatment effect of the minimum wages to the quantile treatment effect.Combining the unconditional quantile method,which is based on the decentralization influence function,with the natural experimental method,this dissertation establishes a difference-in-differences unconditional quantile regression model to analyze the impact of the minimum wages on the wage distribution of rural migrant workers.The results indicate that the increase of minimum wages has a significant positive impact on low-wage workers' wages and the spillover effects of minimum wages diminish gradually along the wage distribution.Specifically,this dissertation finds that the magnitude and range of wage distribution caused by the spillover effects is in proportion to the extent of minimum wages hikes.As for the low-skilled rural migrant workers,there is a significant spillover effect of the minimum wages.However,as for the group of high skilled rural migrant workers,the spillover effect is generally not observed.This result indicates that the increase of minimum wages has not led to an obvious substitution of high-skilled rural migrant workers for low-skilled migrant workers.Therefore,the government should increase the minimum wages progressively,which will not only lead to an increase of rural migrant workers' wage,but also help reduce wage inequality.The conclusion of this paper leads to a better understanding of the mechanism through which minimum wages impacts the wages of rural migrant workers in China.It further helps improve the minimum wage system in China and has referential value for the design and evaluation of various public policies,including policies that are targeted at protecting the rights and interests of rural migrant workers and those that are aimed to adjust the income gap.