The Impact of Minimum Wages on Employment: Evidence from a Lower Middle-Income Country. A new GLO Discussion Paper by GLO Fellow Cuong Nguyen.

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A new GLO Discussion Paper finds for Vietnam no significant effects from minimum wages on employment and monthly wages, but considerable negative effects on workers’ total working hours.

Cuong Nguyen

GLO Discussion Paper No. 1253, 2023

The Impact of Minimum Wages on Employment: Evidence from a Lower Middle-Income Country – Download PDF
by Nguyen, Cuong Viet

GLO Fellow Cuong Nguyen

Author Abstract: In this study, we examine the impact of minimum wages in Vietnam using individual-level data from the 2012-2020 annual Labor Force Surveys. During this period, the average real minimum wage increased by around 4% per year. Overall, we do not find significant effects from minimum wages on employment and monthly wages. However, we find a considerable negative effect on workers’ total working hours. Working hours per week are reduced by 0.38% for a 1% increase in the minimum wage. Since total wages remain unchanged, a reduction in working hours results in an increase in hourly income. A 1% increase in the minimum wage leads to a 0.32% increase in hourly wages. Interestingly, for workers earning below minimum wage, we find a positive effect from minimum wages on their monthly income. A 1% increase in the minimum wage increases monthly income of workers earning below minimum wage by 0.83%.

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JUST PUBLISHED

Vol. 36, Issue 2, April 2023: Journal of Population Economics (JOPE) 16 articles.
https://link.springer.com/journal/148/volumes-and-issues/36-2

Vol. 36, Issue 1, January 2023: Journal of Population Economics (JOPE) 16 articles. https://link.springer.com/journal/148/volumes-and-issues/36-1
Watch the videos of article presentations on December 1, 2022 during the GLO Global Conference 2022.

JOPE has CiteScore 6.5 (2021, LINK) & Impact Factor 4.7 (2021, LINK)

GLO Discussion Papers are research and policy papers of the GLO Network which are widely circulated to encourage discussion. Provided in cooperation with EconStor, a service of the ZBW – Leibniz Information Centre for Economics, GLO Discussion Papers are among others listed in RePEc (see IDEAS,  EconPapers). Complete list of all GLO DPs – downloadable for free.

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