Impact of minimum wage legislation on gender differentials in sticky wages: evidence from Korea

Cho, Jungho; Yang, Daecheon

doi:10.1080/13504851.2021.2000929

Cited by 4 publications

(2 citation statements)

References 14 publications

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“…The results of more descriptive research comparing wage distributions (3) suggest that there is an inverse relationship between MW and wage and/or income inequality, especially for certain disadvantaged groups. (Cho & Yang, 2021), for Korea over the period 2010 to 2020, found that MW reduced the gender pay gap. 5 Also, (Laporšek, Vodopivec, & Vodopivec, 2021) in Slovenia, where the minimum wage increased by 22.9% in 2010, showed that the effect was greater for women, young people, and workers with lower educational attainment or low employment status.…”

Section: Systematic Review From 2020 To 2024mentioning

confidence: 99%

“…𝑋 represents other explanatory variables included in the model (gender, mode of cohabitation, and tertiary education). Different studies, as seen in section 2, show that the effect of the wage increase is different among certain more disadvantaged groups and according to their level of education, as in the case of women (Cho & Yang, 2021;Laporšek et al, 2021) or single-parent families (Alinaghi, Creedy, & Gemmell, 2020).…”

Section: Multiple Regression Modelmentioning

confidence: 99%

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Effects of the Minimum Wage (MW) on Income Inequality. Systematic Review and Analysis of the Spanish Case

de Paz-Báñez,

Sánchez-López,

Asensio-Coto

2024

Preprint

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Background. The minimum wage has become a standard measure in economic and social policies of countries all over the world and it directly or indirectly affects between 20% and 30% of the labour force. The primary objective of this measure is to guarantee that workers receive a minimum wage that allows them to lead a decent life, thereby reducing inequality and poverty. However, studies on the minimum wage have not focused on assessing the effects on these dimensions, but on employment, anticipating a negative effect (in line with the traditional theory of perfect competition), which they have been unable to substantiate. Objectives and Methods. The objective of this study is to address this research gap by analysing the effects of minimum wage increases on income inequality and poverty. To this end, firstly, a systematic review of the empirical analyses was conducted using the PRISMA methodology, with a view to ensuring that all empirical evidence was available. Secondly, the Spanish case was examined. As the significant increase in minimum wage in Spain in 2019 (21,3% in real terms) presents an invaluable opportunity to utilise this event as a natural experiment to generate new evidence, a difference-in-differences approach was employed to assess the impact of this phenomenon. Results. In relation to the first objective, a number of non-exhaustive and outdated literature reviews have been identified, which have been subjected to a critical review. In addition, a total of 31 articles that empirically analysed this relationship in recent years (2020-2024) have been included. The available evidence indicates a clear inverse relationship between the minimum wage and inequalities and poverty. Regarding the Spanish case, there has been a dearth of scientific studies on this subject, particularly in the context of the significant increase observed in 2019, which makes this article of particular relevance. The results are statistically significant, demonstrating an increase of approximately 18% in annual gross income among low-income households, relative to the control group. Furthermore, there is evidence of a spillover effect and a lighthouse effect towards income groups closer to the treatment group. This suggests that the minimum wage increase has a positive impact on the income of workers earning just above the new minimum and even below it. This result is consistent with the existing literature, which shows that minimum wage increases have a positive effect on the income of workers earning slightly above or below the new minimum. Scientific contribution. In doing so, two new basic scientific contributions were made: a systematic, exhaustive, and up-to-date literature review (up to June 2024), as there is, to our knowledge, no recent systematic review of this relationship (minimum wage vs. inequality). Then, the introduction of new scientific evidence demonstrating that a significant increase in the minimum wage can significantly improve the income of low-wage earners without the adverse effects that would otherwise disrupt this positive effect, thereby reducing income inequality and poverty. As a limitation of the study, it would be desirable to delve deeper into other aspects not analysed here, such as the effects on productivity and consumption. Furthermore, it has not been possible to analyse the medium and long-term effects, due to data limitations. Nevertheless, there is evidence that inequality and poverty are on a downward path.

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Section: Systematic Review From 2020 To 2024mentioning

confidence: 99%

Section: Multiple Regression Modelmentioning

confidence: 99%

Effects of the Minimum Wage (MW) on Income Inequality. Systematic Review and Analysis of the Spanish Case

de Paz-Báñez,

Sánchez-López,

Asensio-Coto

2024

Preprint

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An empirical analysis of gender differences in asymmetric labor adjustment: evidence from Korea

Cho,

Hyeon,

Lee

et al. 2024

Rev Account Stud

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This paper documents the difference in asymmetric labor adjustment between male and female employees, as alluded to in the labor economics literature. Based on detailed gender-specific employment disclosures of Korean-listed firms, we report a significant presence of labor cost stickiness. Breaking labor costs down, we further show that labor cost stickiness is mainly attributable to the asymmetric adjustment of employment rather than that of wages. More importantly, this adjustment is more salient for males than it is for females, suggesting that managers tend to dismiss females to a greater extent than males during sales downturns than they recruit during sales upturns. In cross-sectional analyses, we present evidence that formal and informal institutions underlie the asymmetric labor adjustment. Lastly, gender differences in asymmetric labor adjustment widen the tenure gap across gender, which may contribute to the low likelihood of firms appointing and promoting female executives.

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How does minimum wage affect firm pollution discharges: Evidence from China

Guo

2023

Journal of Cleaner Production

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Impact of minimum wage legislation on gender differentials in sticky wages: evidence from Korea

Cited by 4 publications

References 14 publications

Effects of the Minimum Wage (MW) on Income Inequality. Systematic Review and Analysis of the Spanish Case

Effects of the Minimum Wage (MW) on Income Inequality. Systematic Review and Analysis of the Spanish Case

An empirical analysis of gender differences in asymmetric labor adjustment: evidence from Korea

How does minimum wage affect firm pollution discharges: Evidence from China

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