02136cas a2200265 a 4500 AALejournalIMF014765 230101c9999 xx r poo 0 0eng d 5.00 USD 9781498332309 1018-5941 BD-DhAAL BD-DhAAL Huang, Yi. Minimum Wages and Firm Employment : Evidence from China / Yi Huang, Prakash Loungani, Gewei Wang. Washington, D.C. : International Monetary Fund, 2014. 1 online resource (47 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper provides the first systematic study of how minimum wage policies in China affect firm employment over the 2000-2007 periods. Using a novel dataset of minimum wage regulations across more than 2,800 counties matched with firm-level data, we investigate both the effect of the minimum wage and its policy enforcement tightening in 2004. A dynamic panel (difference GMM) estimator is combined with a 'neighbor-pairs-approach' to control for unobservable heterogeneity common to 'border counties' that are subject to different minimum wage changes. We show that minimum wage increases have a significant negative impact on employment, with an estimated elasticity of -0.1. Furthermore, we find a heterogeneous effect of the minimum wage on employment which depends on the firm's wage level. Specifically, the minimum wage has a greater negative impact on employment in low-wage firms than in high-wage firms. Our results are robust for different treatment groups, sample attrition correction, and placebo tests. Mode of access: Internet Loungani, Prakash. Wang, Gewei. IMF Working Papers; Working Paper ; No. 2014/184 Full text available on IMF http://elibrary.imf.org/view/journals/001/2014/184/001.2014.issue-184-en.xml IMF e-Library