| Internationally,the main goal of minimum wage policy is to improve the living standard of low-income groups,eliminate poverty and narrow the income gap.Can Minimum Wage Policy Reduce Poverty Incidence in China? If the majority of workers receiving the minimum wage are concentrated in middle-and high-income families,then even raising the minimum wage standard will not improve the living conditions of low-income people,and may even widen the income gap.This paper takes the relationship between the minimum wage standard and poverty as the research object and deeply analyzes how the minimum wage policy in China affects poverty and income gap.Based on the panel data of China Tracking Survey Data(CFPS)in 2014,2016 and 2018,this paper analyzes the impact of minimum wage standards on poverty and income inequality.Based on the level of wages in the minimum wage is 0.9 times to1.2 times between workers,wages under minimum wage standard double laborer,as a representative of the workers affected by the minimum wage standard for this part of the group on descriptive statistics,the distribution of household income is found that the influence of the minimum wage workers in the distribution of low-income families is less,Between 2014 and 2018,fewer than 30 percent of workers in the bottom 40 percent of households were affected by the minimum wage.This paper then simulated the changes in the incidence of poverty and family income after the minimum wage increases by 20%,and found that the increase of the minimum wage can reduce the incidence of poverty and narrow the income gap,but the effect is not obvious,and the reduction of the incidence of poverty and the Gini coefficient are both less than 0.5%.However,the increase of minimum wage has a greater effect on the per capita income of low-and middle-income families than that of high-income families.In 2014,for example,the per capita income of families in the bottom 20 percent and 40 percent increased by 2.98 percent and 3.28 percent,respectively,while the per capita income of families in the top 20 percent increased by only 0.98 percent.Finally,this paper uses the panel fixed effect model and the panel Logit model to conduct further empirical tests,and the main conclusions are as follows:The first is the impact of minimum wages on absolute poverty.The rise of the minimum wage standard has no significant effect on the absolute poverty of China’s overall residents’ income.For the urban sample,the increase of minimum wage will significantly reduce the urban absolute poverty,while for the rural sample,the increase of minimum wage will significantly increase the rural absolute poverty,the two effects offset each other,making the minimum wage has no obvious impact on the overall absolute poverty in China.There are several reasons why an increase in the minimum wage can reduce absolute urban poverty: First,workers affected by the minimum wage are mainly concentrated in middle and low-income families in urban areas.In 2014,38.17% of workers affected by the minimum wage belong to the bottom 40% of families,and in2018,42.03% belong to the bottom 40% of families.The rise of minimum wage has a great impact on the income promotion of low-income families in urban areas.Secondly,according to the results of panel quantile regression,the increase of minimum wage standard will significantly increase the per capita income of urban low-income families.Thirdly,through the empirical study on the effect of minimum wage on household employment,we find that the increase of minimum wage will significantly increase the proportion of employed workers in urban families,and with the increase of family income,the positive effect of minimum wage on the proportion of employed workers will gradually increase.There are several reasons why an increase in the minimum wage will increase absolute poverty in rural areas: First,workers affected by the minimum wage are mainly concentrated in middle and high-income families in rural areas,and the distribution proportion is small in low-income families.Taking 2014 as an example,only 20.16% of workers affected by the minimum wage belong to the lowest 40% of families.The rise of the minimum wage has less impact on the income of low-income families in rural areas.Second,according to the regression results of panel quantile,the increase of minimum wage has little economic impact on the per capita income of low-income families in rural areas.In rural areas,for families with the lowest income of 20%,the increase of minimum wage by 10% will increase the per capita income of families by 6.93%,while in urban areas,the increase of minimum wage by 10% will increase the per capita income of families.Would increase the per capita income of households in the bottom 20% by 14.34%;Thirdly,through the empirical study of the minimum wage on family employment,it is found that the rise of the minimum wage will significantly reduce the proportion of employed workers in rural low-income families.The second is the impact of minimum wage standards on relative poverty.The rise in the minimum wage has reduced relative poverty in our country.For the urban sample,the increase of minimum wage will also significantly reduce urban relative poverty,while for the rural sample,the effect of minimum wage on rural relative poverty is not significant.This is due to the towns in all the samples and sample,the influence of the minimum wage workers are mainly concentrated in low-income families,and according to the results of quantile regression,the rise in the minimum wage for greater effects on the per capita income of low-income families,will significantly increase the per capita net income of low-income families,families with higher levels of income,the growth effect will gradually weaken,This is also consistent with the conclusion of the simulation analysis.After the minimum wage increases by 20%,the per capita income of low-income families increases more than that of the middle and high income groups,narrowing the income gap and thus alleviating relative poverty.In the rural sample,the influence of the minimum wage workers in the distribution proportion of low-income families in the countryside is less,mainly concentrated in the rural middle and high income families,and according to the empirical analysis,the rise in the minimum wage will significantly increase the per capita income of each family,with the increase of household income group,growth effect decreases,but little change.The regression results show that for families with the lowest 20% of income,a 10% increase in the minimum wage will increase the per capita income of families by 6.93%,while for families with the highest 20% of income,a 10% increase in the minimum wage will increase the per capita income of families by 6.22%,with a difference of only 0.71%.Therefore,the minimum wage standard can narrow the rural income gap,but the effect is not obvious,so that the minimum wage standard has no significant impact on the relative poverty in rural areas.The analysis of this paper shows that the minimum wage policy has no significant effect on the alleviation of absolute and relative poverty in China,which is different from the developed countries.This is mainly because the minimum wage policy is a labor market system,which affects the labor market,and the participation of the poor families in the labor market in China is low.Therefore,if you want to the minimum wage policy to alleviate absolute poverty and relative poverty play a significant role in our country,the need to do the following work: first,the government should vigorously develop vocational training courses,improve the low income of human capital,reduce the risk of its elimination,can enjoy the welfare of the rise in the minimum wage standard.At the same time,the government should also encourage the idle labor force in low-income families to get reemployed and improve the labor participation rate of low-income families,which plays an important role in improving the living standards of low-income families.Second,after 2020,China’s poverty alleviation policy should give full play to the role of minimum wage in poverty reduction in urban areas to alleviate urban poverty,while for rural poverty,other poverty alleviation policies should be adopted to guarantee the living standard of rural poor families.Third,the implementation of minimum wage standards should be targeted.In the process of implementing minimum wage standard,we should pay special attention to the impact of minimum wage on low-income groups and give full play to the role of minimum wage standard in alleviating poverty and narrowing income gap. |
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