Contents

The Impact of Minimum Wage Introduction on Characteristics of New Establishments: Evidence from South Korea

Baek, Jisun / Changkeun Lee / WooRam Park

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Abstract

This paper examines whether imposing minimum wage alters the characteristics of new businesses. Applying a difference-in-differences framework to repeated cross-sectional data of new plants, we explore the impact of minimum wage introduction on characteristics of new plants in South Korea. We first confirm that the minimum wage introduction induced new plants to have higher remuneration to workers. Due to the imposed minimum wage, the new plants tend to start with fewer employees and to equip their employees with more capital. Finally, we find that the minimum wage introduction led to higher labor productivity among entering plants.

Issue Date
2019-07
Publisher
KDI School of Public Policy and Management
Keywords
Minimum Wage Introduction; Employment; Capital Intensity; Labor Productivity; Entering Plants; Establishment-Level Data
Pages
30
Series Title
KDI School Working Paper 19-11
URL
https://ssrn.com/abstract=3418129
Language
ENG
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