A Research Of The Effect Of The Minimum Wage Law On The Rural Labour Employment

Neither the economic development nor the reform of cities can not succeed without rural labour.Rural labour ,as a new group of people,have become important human resources for the construction and development of cities.It is well known that the rural labor supply exceeds demand in the labour market and the rural labour's wage is lower . The paper analyzes the rural labour employment effect of the minimum wage law and the reasons.By reference to domestic and overseas theories and research methods,explaining from the economics perspective,this paper analyzes the rural labour employment effect of minimum wage law both in theoretical and empirical perspective.According to Mincer′s two sector model,the economy can be divided into the minimum wage covered sector and the non-covered sector.these are some reasons that lead to non—negative employment effect of minimum wagw law in rural labour maket,sunch reasons as the lower equilibrium wage,the lower minimum wage,the smaller demand elasticity,lower vacancies. The above hypothesis is subject to empirical test by constructing fixed effect model.The conclusion is that the employment effect of minimum wage is positive.One reason is the positive policies which raise the minimum wage and lead to increases the employment of rural labour .The other reason is that the minimum wage and the rural labour′s wage are lower,which lead to decrease cost in the total costof firms.Because the rural labour employment effect of minimum wage is positive, the government should raised the minimum wage and take step to strengthen and improve the minimum wage law execution in order to protect the interests of the rural laborer practically.