The Effect Of Minimum Wage On Labor Supply Of Rural Migrant Workers

Minimum wage system as an important political choice of government to control the labor market,the discuss of its effects on labor supply,in respect of both employment(extensive margin)and working hours(intensive margin),has become the central topic of relative researches in both theoretical analysis and empirical tests.However,economists have debated whether the minimum wage system can effectively improve the economic conditions of low-income workers during quite a long period.This divergence stems from the fact that raising minimum wage will inevitably have a negative effect on the employment of low-income labor represented by rural migrant workers and extend their working hours,the effect on the labor supply of rural migrant workers has not yet been determined.Therefore,the study on effect of minimum wage on labor supply has very important theoretical and practical significance.Based on the existing theories of the labor supply effect of hourly minimum wage,this dissertation constructed a theoretical analysis framework based on the monthly minimum wage in line with the situation of labor market in China.It is found that regardless of the labor market structure,rising monthly minimum wage will extend the working hours of rural migrant workers,and the employment effect of monthly minimum wage will change from positive impact to negative effect with the increase of marketization level,thus unable to determine the effect of minimum wage on labor supply for rural migrant workers,which needs to be tested by empirical research.On the basis of theoretical research,this dissertation examines the effect of the minimum wage on the labor supply of rural migrant workers,and discusses the reasons for the divergence of research conclusions in the evaluation of the effect of the minimum wage on labor supply.Firstly,this dissertation uses the fixed effect model to analyze the effect of minimum wage on the labor supply change of rural migrant workers.It is found that the increase of minimum wage has a significant negative effect on the employment of rural migrant workers,which is asymmetric and mainly reflected in the reduction of employment inflow of female rural migrant worker,and the negative effect is concentrated on the low-skilled female rural migrant workers and the first generation of female rural migrant workers;increasing the employment inflow of high-skilled male rural migrant workers,while reducing the employment outflow of first generation of male rural migrant workers;In the labor market,there is the substitution of high-skilled workers for low-skilled workers;The working hours of rural migrant workers have been significantly extended due to the increase of the minimum wage,and there is a substitution of working hours for employment in the labor market;The extension of rural migrant workers' working hours cannot compensate for the decline in employment,resulting in the reduction of rural migrant workers' labor supply.Secondly,on the basis of correcting the multivariate sample selection bias,this dissertation analyzed the effect of minimum wage on the labor supply structure of rural migrant workers,and makes a mechanism analysis.It is found that increasing minimum wage leads to the decline of both the formal and informal employment of rural migrant workers,and the negative effect on the formal employment is less than the other,it also extents working hours of the formally employed rural migrant workers,while the working hours of the informally employed rural migrant workers remain unchanged.Due to the increase of non-wage welfare of informally employed rural migrant workers,its superposition with wage leads to the expansion of the negative effect of increasing minimum wage on the informal employment,and the increase of minimum wage will cause structural change of rural migrant workers employment,as well as promote the formalization of employment for rural migrant workers.Thirdly,the lagged effect of the minimum wage is investigated in the dissertation to distinguish the short-term and long-term effects of the minimum wage on the labor supply of rural migrant workers.It is found that in the short-term,the minimum wage has a negative effect on the employment of both female and male rural migrant workers.While in the long-term,the minimum wage has a negative effect on the employment of male rural migrant workers,but it does not have a significant negative impact on the employment of female rural migrant workers.Since the long-term increasing wage rate of male rural migrant workers is greater than the increase of minimum wage,the price effect of the increasing minimum wage and the negative effect on the employment of male rural migrant workers will gradually be weakened,and the employment will increase.Since the increasing minimum wage has a continuous positive effect on the wage of female rural migrant workers,the negative effect on the employment of female rural migrant workers will disappear,and even will slightly promote the employment of female rural migrant workers.Fourthly,the spillover effect of minimum wage on the labor supply of rural migrant workers is analyzed by establishing the durbin model of spatial panel in the dissertation.By constructing three kinds of spatial measurement weights,robust regression results can be obtained in this dissertation.In the analysis of the effect of minimum wage on employment and labor supply,no spatial spillover effect is found,and the minimum wage has spatial spillover effect on working hours,which indicates that the impact of the minimum wage on the employment and labor supply of rural migrant workers mainly comes from the adjustment of the minimum wage in this province,rather than the spillover effect of the minimum wage in other regionsFinally,marketization is incorporated into the analysis of the effect of minimum wage on labor supply to explore the reasons for regional differences.The dissertation finds that there are regional differences in the labor supply effect of minimum wage,and marketization can significantly improve the employment of rural migrant workers,reduce the working hours of rural migrant workers,and alleviate the excessive labor of rural migrant workers.The impact of marketization on the labor supply effect of minimum wage is shown as follows: when the marketization level is low,the promotion of minimum wage has a positive effect on the employment and working hours of rural migrant workers(labor supply increases);When the marketization level is high,raising the minimum wage has a negative effect on the employment and working hours of rural migrant workers(labor supply declines).Through the above analysis,the policy suggestions provided in this dissertation are as follows :(1)The government departments should encourage and support the production technology research and innovation of enterprises,especially vigorously support the priority transformation and upgrading of labor-intensive enterprises to improve the market competitiveness of products.The government departments should vigorously support and cultivate small and medium-sized enterprises that absorb low-income labor,provide tax reduction and fee reduction for small and medium-sized enterprises,reduce rent and interest rate,reduce production and operation costs of enterprises,and reduce the burden of enterprises.Strengthen financial support for small and medium-sized enterprises to help them improve their ability to resist risks such as rising labor costs;(2)The government departments should strengthen the supervision of the implementation of standard working hours of enterprises,further regulate the payment of rural migrant workers' wages by enterprises,and play a good role of trade unions in the supervision of enterprises.Improve the signing rate of labor contracts of rural migrant workers,promote the formalization of employment of rural migrant workers,regulate the working hours of rural migrant workers,and curb the excessive labor of rural migrant workers.At the same time,the government should improve the growth mechanism of hourly minimum wage;(3)the government should carefully and gradually adjust the minimum wage to avoid causing a significant reduction in the employment of rural migrant workers.In the process of adjusting the minimum wage,we should take into account the employment stability and wage growth of rural migrant workers,and balance the relationship between them;(4)The government departments should vigorously develop rural education,vocational education and training,in order to promote rural migrant workers to accumulate human capital.Meanwhile,the government departments,in the form of subsidies,supports enterprises to carry out professional skills training for rural migrant workers on the job and those waiting for jobs,so as to achieve stable post training and promote stable post employment for rural migrant workers.Through improving the skill level of the rural migrant workers,the government departments should promote the orderly transformation of rural migrant workers' work,improve the their re-employment ability,and improve the employment quality and level of rural migrant workers,and finally optimize the employment structure of migrant workers;(5)The government departments should actively expand the employment channels of rural migrant workers,create employment channels,strengthen the employment service and market supervision,standardize the professional intermediary according to law,and provide good employment services for rural migrant workers.The government departments should provide public welfare jobs and develop jobs suitable for rural migrant workers;(6)The government departments should continue to deepen the market-oriented reform,promote the sustained and stable growth of China's economy by optimizing the allocation of resources,play the leading role of central cities and urban agglomerations,cultivate emerging industrial clusters,adjust the minimum wage according to the regional marketization level and local conditions,and enable urban and rural residents to share the fruits of China's social development and economic growth.The adjustment of the minimum wage in China has entered a slow period,the research conclusion of this dissertation provide a basis for the government to adjust the range and frequency of the minimum wage,which is helpful to further improve the minimum wage growth and evaluation mechanism.It is helpful to understand the reasons for the existing differences in empirical research conclusions and deepen the understanding of labor market system and operation rules in China.