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Minimum Wage Effects: Empirical Evidence from Japan

Change at Home, in the Labor Market, and On the Job

ISBN: 978-1-83909-933-5, eISBN: 978-1-83909-932-8

ISSN: 0147-9121

Publication date: 23 November 2020

Abstract

Recent empirical studies have improved methodologies for identifying the causal effects of policies especially on a minimum wage hike. This study identifies causal effects of minimum wage hikes across 47 prefectures in Japan from 2008 to 2010 on employment, average hourly wage, work hours, full-time equivalent employment (FTE), total wage costs, average tenure, separation and new hiring in establishments using a micro dataset of business establishments in restaurant, accommodation, and food takeout and delivery industry. Various regression specifications including controls for time-varying regional heterogeneity are implemented by using the bite of the minimum wage in each establishment. First, this study finds that the effects of a revision of minimum wage on employment and FTE in the establishment are statistically insignificant, but the effects on hourly wages and total wage costs are statistically significant. Subsequently, it considers how the establishments react to the increase in total wage costs caused by the revised minimum wage, and finds that separation from the establishment may decrease, and average tenure of workers may increase.

Keywords

Acknowledgements

Acknowledgments

I would like to thank three anonymous referees and editors of the Research in Labor Economics for many valuable comments. An earlier draft was presented at the lunch time seminar in Osaka-University of Economics, and the 13th HERI-ISBR Joint Symposium in Hanyang University in 2016. Comments of participants of the workshops, and comments from Jeong Hwan Lee, Yukio Fukumoto, and Hiroyuki Nishiyama are gratefully acknowledged. I am also grateful to Izumi Kurosaka, Yuko Goami, and Kouichi Watanabe for their help with use of micro data from the Basic Survey on Wage Structure, which was permitted by the Japanese Ministry of Health, Labour and Welfare. I am grateful for the financial support of a Grant-in-Aid for Scientific Research, Kakenhi Grant Number, JP26380343 from the Japan Society for the Promotion of Science (JSPS), and the research fund from the Aichi Prefectural University.

Citation

Yamaguchi, M. (2020), "Minimum Wage Effects: Empirical Evidence from Japan", Polachek, S.W. and Tatsiramos, K. (Ed.) Change at Home, in the Labor Market, and On the Job (Research in Labor Economics, Vol. 48), Emerald Publishing Limited, Bingley, pp. 107-151. https://doi.org/10.1108/S0147-912120200000048004

Publisher

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Emerald Publishing Limited

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