Research On The Effect Of Minimum Wage On Employment

Debate on employment effects of minimum wage has never stopped since this system established. Both domestic and overseas researchers have done a lot of theory and empirical studies, but they still don’t draw any unified conclusion. China has the most population, and employment is top priority, so how to solve employment is an important problem. At the same time, the long-term low wages in special circumstances harms lawful rights and interests of Low Income Group. The reality makes minimum wage become a necessary supplement to market mechanism, so research on employment effects of minimum wage has important significance.We conclude that the employment effects of minimum wage are closely related to the environment through analyzing related literature. Domestic research is deficient, especially large sample panel data research. And most research just carry out overall analysis. This paper divvies areas according to the level of economic development, and differentiates employment population, draws the conclusion that corresponding employment effects to different kinds of employees. It can provide basis to formulate more scientific and reasonable minimum wage standard.This paper firstly reviews and summarizes domestic and foreign theory and empirical studies. Then we use the buyer monopoly model to analyze the employment effects and then expand this model. We come up a conclusion that the quantity of minimum wage standard will determine the concrete employment effects. This system isn’t necessarily cause unemployment because the standard is low now. Then we select relevant data cover20regions and12years (1999-2010), use the panel data to analyze it. We carry out overall analysis and other analysis. The empirical results show that, the minimum wage has positive employment effects overall. In the specific analysis, we find that different factors have different employment effects. In the end, we put forward minimum wage standard for China according to research results. We should take sex, industry and other factors into consideration when we draw up minimum wage system.