Minimum Wages and Productivity: An Overview and Evidence from Japan

         
Author Name MORIKAWA Masayuki (Vice President, RIETI)
Creation Date/NO. June 2019 19-P-012
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Abstract

The main objectives of minimum wage is to ensure appropriate earnings for low-wage workers and to reduce inequality. However, recently, the relationship between minimum wage and productivity is actively debated in Japan. This study surveys literature on this issue and presents some evidence on the relationship between minimum wage and productivity using prefecture- and firm-level panel data. According to the estimations, we do not detect evidence that increases in minimum wage improve productivity.