Author(s)

XueJiao Yang¹, Hui Li^2,*

Affiliation(s)

¹School of Economics and Management, Dali University, Dali 671003, Yunnan, China.

²School of Public Health, Dali University, Dali 671003, Yunnan, China.

Corresponding Author

Hui Li

ABSTRACT

Based on the dynamic OP method, this paper examines the impact of Minimum wage regulations on the productivity of China's manufacturing industry from two aspects: resource allocation and production incentive. It is found that the implementation of the policy improves the compliance of enterprises, Narrows the labor price distortion gap, and improves the static configuration. At the same time, the policy will also dredge the exit channel of the market and improve the dynamic allocation of resources between the exiting enterprises and the surviving enterprises. Policy benefits also exist in the productivity incentive of enterprises under the forced mechanism. Using the data of Chinese industrial enterprises and the minimum wage data of prefecture-level cities, the empirical test is carried out. Therefore, the Chinese government should speed up the improvement of the minimum wage system supervision system, "grasp the small and magnify", and pay attention to the incentive effect of such systems on the market mechanism and production efficiency.

KEYWORDS

Minimum wage regulation; Industry productivity; Enterprise productivity; Static resource allocation; Dynamic resource allocation

CITE THIS PAPER

XueJiao Yang, Hui Li. The impact of minimum wage regulations on industrial productivity in China. Trends in Social Sciences and Humanities Research. 2024, 2(8): 27-30. DOI: 10.61784/tsshr3077.

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