Minimum wage hikes in China lead to job losses in low-wage firms.
Minimum wage increases in China from 2000-2007 led to a decrease in firm employment, especially in low-wage firms. The study used data from over 2,800 counties and found that for every increase in minimum wage, employment decreased by 0.1%. The impact was stronger in firms with lower wages compared to those with higher wages. The findings were consistent across different groups and tests, showing a clear link between minimum wage policies and firm employment levels.