Seminar Vol. 149
Title: Minimum Wages, Employment and Business Closing: Evidence from Employer-Employee Matched Panel Data
Speaker: Jungmin Lee, Seoul National University
Time: May 5th, 2019 13:30–15:00
Venue: Conference Room 106B, Zhonghui Building (IESR, JNU College of Economics)
About the speaker:
Jungmin Lee is a Professor in the Department of Economics, Seoul National University, and a Research Fellow at the Institute for the Study of Labor, IZA (Bonn, Germany). After earning his Ph.D. from the University of Texas at Austin in 2004, Jungmin Lee worked as an Assistant Professor at the University of Arkansas at Fayetteville, Florida International University (Miami), and later as an Associate Professor at Sogang University (Seoul, South Korea). His main fields of interest are Labor Economics, Applied Microeconomics, Law & Economics, and Experimental Economics. Jungmin Lee is currently a Co-editor of Korean Economic Review and Korean Journal of Applied Economics. Throughout his career, the economist has widely published in leading international journals such as Labor Economics, Journal of Law & Economics, The Rand Journal of Economics, Economic Inquiry, Journal of Behavioral and Experimental Economics, and others.
Abstract:
We decompose employment changes in response to increases in the national minimum wage into changes on the extensive and intensive margins. We use payroll-record data on small-sized establishments in South Korea where we can identify not only continuing and exiting establishments but also continuation of individual workers’ employment and their work hour changes in continuing establishments. We utilize variation in the minimum wage’s bite across establishments as well as within establishments over years. We find that more than a half of the minimum wage’s employment effect occurs through deaths of establishments. Also, continuing establishments are less likely to hire new employees but, when they hire new ones, they are more likely to hire male, less than college, older workers. Individual-level analyses show that, within continuing establishments, employees who are bound by the minimum wage’s increases are more likely to be laid off. Further, we find a negative spillover effect on their coworkers.
