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Trade and Minimum Wages in General Equilibrium: Theory and Evidence / Xue Bai, Arpita Chatterjee, Kala Krishna, Hong Ma.
- Format:
- Book
- Author/Creator:
- Bai, Xue.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w24456.
- NBER working paper series no. w24456
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Trade and Minimum Wages in General Equilibrium
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2018.
- Summary:
- This paper develops a new model with heterogeneous firms under perfect competition in a Heckscher-Ohlin setting. We derive a novel prediction regarding the effect of minimum wages on selection, namely that a binding minimum wage will raise (or lower) TFP at the firm and industry level depending on whether the capital intensity of entry costs exceeds (falls short of) that of production. Exploiting rich regional variation in minimum wages across Chinese counties and using firm level production data, we find robust evidence in support of causal effects of minimum wages consistent with our theoretical predictions.
- Notes:
- Print version record
- March 2018.
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