The Effects Of Minimum Wages On Labor Supply Of Migrant Workers

Migrant workers is an important part of urban labor market, but generally as a result of migrantworkers low level of human capital, migrant workers receive lower wages. Minimum wage laws play animportant role in ensuring the low-income groups, including migrant workers get reasonable labor income,there are differences in theoretical results and empirical research results with respect of the domestic andforeign research about the effect of minimum wages on labor supply of migrant workers, so this research inthe master thesis is particularly important.Based on Rural-Urban Migration in China data from2007to2008, I consider minimum wagestandards increase in2008as a natural experiment, using the regression adjusted difference in differencesmodel and the method of panel data in analysis of the minimum wage effect on labor supply of migrantworkers.In the minimum wage effect on employment of migrant workers analysis, first of all, based on thepooled cross-sectional data, I estimate equations of migrant workers employment in the analysis ofminimum wage effects on employment of both female and male migrant workers. Secondly, on the basis ofpanel data, I estimate migrant workers employment change equation, and calculate the employmentelasticity for migrant workers. Finally, I further analyzes the minimum wages effect on low-skilled migrantworkers and high-skilled migrant workers, and estimate both employment and employment changeequations, with calculating the employment elasticity for low-skilled migrant workers and high-skilledmigrant workers. Overall, the research results show that the minimum wage increase has a significantnegative influence on female migrant workers employment, with no significant employment effect on malemigrant workers.It has no impact on female and male migrant workers employment outflow oremployment inflow of male migrant workers, but reduces female migrant workers employment, with theemployment elasticity is-0.6211, which means that minimum wage increase reduces the possible to searchfor new jobs among female migrant workers in the labor market. A higher minimum wage reducelow-skilled migrant workers employment, and has no significant effect on high-skilled migrant workersemployment. At the same time, it has no impact on low-skilled and high-skilled migrant workersemployment outflow, but has a negative effect on employment inflow of low-skilled and high-skilledfemale migrant workers, with the employment elasticity-0.7908for low-skilled female and-0.2621forhigh-skilled female. A higher minimum wage has positive impact on employment inflow for high-skilledmale migrant workers, whose employment elasticity is0.1106. Therefore, the government should helpfemale migrant workers, especially low-skilled female migrant workers when increase the minimum wagestandard, and should gradually increase minimum wage standard.In the minimum wage effect on hours of migrant workers analysis, first of all, based on the pooledcross-sectional data, I estimate equations of migrant workers hours in the analysis of minimum wageeffects on hours of both female and male migrant workers. Secondly, on the basis of panel data, I estimatemigrant workers hours change equation, and calculate the hours elasticity for migrant workers. Finally, Ifurther analyzes the minimum wages effect on hours among low-skilled migrant workers and high-skilledmigrant workers, and estimate both hours and hours change equations, with calculating the hours elasticityfor low-skilled migrant workers and high-skilled migrant workers. The research results show that theminimum wage increase has a significant positive influence on female and male migrant workers hours,with the hours elasticity0.4708for female and0.3117for male migrant workers. A higher minimum wagehas positive and significant impact on hours for high-skilled female and male migrant workers and low-skilled male migrant workers, with the hours elasticity0.8636for high-skilled female,0.2870forhigh-skilled male and0.3381for low-skilled male migrant workers. Overall, a higher minimum wage hasincreased labor supply of female migrant workers and reduced labor supply of male, meanwhile it hasreduced low-skilled migrant workers labor supply and increased high-skilled migrant workers, whichmeans it increases total labor supply. Therefore, the government should develop education and provide jobtraining to help migrant workers increase their human capital for alleviate increase minimum wage negativeeffect.In this thesis, the study contributes to an understanding of the implementation of minimum wage lawseffect on different groups of migrant workers, to the design and evaluation of the minimum wage laws inChinese labor market and help us to deepen understanding the mechanism of migrant workers laborsupply.It has important theoretical significance and practical significance.