Research On The Impact Of Minimum Wages On Youth Employment In China

Since the appearing of the minimum wage system, it has become an important system of controlling the labor market and improving the social income distribution structure of each government. With the development of Chinese minimum wage system, Chinese government pays more attention to minimum wages, which arouses strong response from our society. According to some data from the international labor organization, the unemployment rate of youth workers was 12.6% globally in 2013. The crisis of youth unemployment has become a difficult problem that each country is facing on the world. From 1998 to 2012, the proportion of youth employment in China was on the decrease each year, and the youth employment status has changed considerably. As the employment of youth whose age is 16-19 years old arouses universal attention from countries on the world, we must pay more attention to it. Because of youth workers lacking skills, they have to get a job in the secondary labor market, thus they can be affected by the minimum wage easily. Our article attempts to analyze the impact of minimum wages on youth employment from the perspective of theoretical and empirical, and study the employment effectiveness of minimum wages. At last, we want to put forward new perspectives and methods to the relationship of minimum wages and youth employment.First of all, this paper generalizes the origin and development process of the minimum wage system in domestic and overseas, and analyzes the gain and loss of it briefly. On the basis of reviewing and evaluating theoretical and empirical studies about the impact of minimum wages on employment in domestic and overseas, we raise the research works of our article. Secondly, from the perspective of realistic, we find the gap and shortage of Chinese minimum wage system by comparing the differences and similarities between Chinese and developed countries’. And we introduce the current situation of youth employment in China. Then, applying the matching function and Nash equilibrium theory, the paper establishes a mathematical model to study the employment effect of minimum wages on youth workers in Chinese secondary labor market, which is based on the labor market segmentation theory of the DMP model originates from abroad. At the same time, we analyze other factors which influence youth employment theoretically. Finally, from perspectives of general and different gender respectively, this paper discusses the relationship between minimum wages and youth employment using econometric model bases on the stepwise regression and correlation test empirically in China. Our research conclusion as follows:Firstly, the minimum wage has positive effect on youth; Secondly, there is an inhibitory action on youth employment; Third, the growth of the second and third industry improves the employment levels of youth; Fourth, the foreign direct investment boosts the growth of youth employment. Fifth, due to the existence of gender discrimination in employment, there is a big difference of the employment effectiveness of minimum wages between male and female youth workers.According to theoretical and empirical research conclusions, we put forward many reasonable suggestions:First, increasing the minimum wage according to the characteristics of different regions, industries and jobs moderately, and making full use of the positive effect of minimum wages on youth employment. And protecting and utilizing youth workers reasonable, choosing an appropriate occasion to establish a youth minimum wage system. Then, promoting third emerging industries to growth and adjusting the internal structure of the tertiary industry on the basis of pushing the development of the third industry. Fourth, guiding the flow of FDI reasonably, promoting the association between industrials and giving play to the indirect positive employment effect of FDI. Last, strengthening the improvement of our employment legislation, eliminating gender discrimination in employment radically and creating posts are suited for female youth workers.