Trade and minimum wages in general equilibrium: Theory and evidence

• 成果类型: Article
• 署名作者: Bai, Xue; Chatterjee, Arpita; Krishna, Kala; Ma, Hong
• 署名单位: Brock University; University of New South Wales Sydney; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; National Bureau of Economic Research; Tsinghua University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2021.103535
• 发表日期: 2021
• 关键词: trade; Minimum wage; general equilibrium; heterogeneous firms; selection

摘要

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. (c) 2021 Elsevier B.V. All rights reserved.