Analysis On The Factors Of Minimum Wage System’s Labor Supply Effect

Based on the analysis of labor supply effect of the wages changes, we study the labor supply effect of the minimum wage system in each province, at the same time, also examine the effect various factors of the minimum wage system’s labor supply effect. The minimum wage system, for different level workers of different income levels, produced different salary changes, the resulting of labor supply effect is also different; for the labors of the same wage, the same wage change in different individual labor supply curve produces different labor supply effect. In the low income labor market, the absolute value of labor supply curve slope increases, the wage’s substitution effect increases, the original labor supply effect level increase of labor supply. In high income labor market, labor supply curve slope is increased to reduce minimum wage labor supply effect, to reduce increasing of labor supply.Using the utility function to analysis the characteristics of labor individuals how to influence the size of the labor supply effect and the positive or negative of the labor supply effect. With the coefficient of risk aversion to change, the slope of the different labor market labor supply curve changes, the minimum wage will increase or decrease the labor supply effect. If labor supply intertemporal elasticity of substitution is bigger, wage labor supply effect increases. The improvement of human capital level and the increase in elderly dependency ratio can reduce labor’s intertemporal elasticity of substitution.Using hierarchical linear models empirically testified the influence of the risk aversion coefficient, elasticity of substitution and their factors on the labor supply effect. Under the different level of individual characteristics structure, the influence of the minimum wage level and other labor characteristics on labor participation rate effect is different, and there are many regimes. The level of human capital, the elderly dependency ratio coefficient is negative. It means that,as the level of human capital, the elderly dependency ratio increases, the minimum wage change on labor supply effect gradually become smaller.At last, on the basis of the theory, using factors of labor supply effect, we analysis the causes and solutions of Chinese " laborer barren ". Improving the income level of low income labors or downsizing the expenditure level workers must pay, can make laborer out of the minimum necessity expenditure constraint, so that the labor supply curve slopes upward to right, the setting or improvement of minimum wage can produce positive labor supply effect. Our thery can explain the different conclusions made adout the minimum wage systerm’s labor supply effect, and in the same time, it proved the infulunce of the labors characteristics to the minimum wage systerm’s labor supply effect...