| dc.description.abstract | In this paper we use an individual-level quasi-longitudinal database to study the impact of changes in legal minimum wages on labor market outcomes. We use difference-in-difference (DID) model to estimate the impact of minimum wage laws on wage growth in Taiwan. This study differs from the literature in that the control group for the DID model is determined by quantile regression. We analyze the minimum wage rate effect on wage growth for both gender and emphasize in particular on urban-rural disparity, company size, educational levels, age groups, and different industrial groups.
Compared to the control group, male low-income group is found to have a larger negative impact on their wage growth than the female low-wage groups. Although there is no serious negative effect on the wage growth rate for female low-wage groups, female high-wage groups may be affected by their employment opportunities after the national minimum wage (NMW) adjustment. Therefore, part of the effect of the NMW adjustment may be reflected in the reduction of employment opportunities for the female control group. Moreover, there is no difference between the impact on urban and rural areas, and among companies of different sizes; however, all of them got negative impacts by the rising NMW. For some years of NMW adjustment, highly educated low-income groups are of relatively larger negatively being shocked by the NMW adjustment on the salary growth than their less educated counterparts. Since about 63% of the low-income groups with higher education are people younger than 30 years old, it means that, obviously, even young people with highly educated may still influenced by the adjustment of NMW negatively. However, there is no difference in the wage growth for workers at various age groups, although all of them are negatively affected by the rising NMW. Overall the continuous adjustment of the NMW is significantly unfavorable for the wage growth rate of the low-income group, no matter in service or manufacturing sectors. After the financial crisis, the negative impact on service sector’s wage growth rate is more serious than that of the manufacturing sector. To sum up, we believe that the continuous increase in the NMW had a significant negative impact on Taiwan′s wage growth rate, and the negative effect has been increasing year by year. | en_US |