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Employment and Growth Effects of Minimum Wage Hike

  • Journal of Regulation Studies
  • 2016, 25(2), pp.3-17
  • Publisher : 한국규제학회
  • Research Area : Social Science > Public Administration

Ki Seong Park 1

1성신여자대학교

Accredited

ABSTRACT

This paper analyzes the harmful effects on employment and economic growth brought by the minimum wage hike. If the 2017 minimum wage is raised to 10,000 wons, the employment decreases by 241 ~ 506 thousands. If it is raised to 9,000, 8,000, and 7,000 wons, the employment decreases by 173 ~ 311, 125 ~ 154, and 46 ~ 65 thousands, respectively. We have an estimation for 15 OECD countries: The economic growth rate decreases by 0.51 % points as the ratio of minimum wage to the average wage increases by 10 % points. According to this, if the 2017 minimum wage is raised to 10,000 wons, the annual economic growth rate decreases by 1.48 % points. If it is raised to 9,000, 8,000, and 7,000 wons, the rate decreases by 1.11, 0.73, and 0.36 % points, respectively.

Citation status

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