The Effect of Exports on Compliance with Minimum Wage Legislation

Xu Helian, Zhang Yanzhe, Wang Haicheng

The Journal of World Economy ›› 2020, Vol. 43 ›› Issue (2) : 99-121.

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The Journal of World Economy ›› 2020, Vol. 43 ›› Issue (2) : 99-121.

The Effect of Exports on Compliance with Minimum Wage Legislation

  • Xu Helian1, Zhang Yanzhe1, Wang Haicheng2
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Abstract

This paper seeks to ascertain whether exporting firms outperform their non-exporting counterparts in terms of compliance with minimum wage regulations and how this is related to exporting activities. Drawing on city-level minimum wage data and firm-level survey data on Chinese industrial enterprises matched with detailed transaction data obtained from China's General Administration of Customs, the empirical analysis reveals a higher rate of compliance among exporting firms than among non-exporting ones. The results exceed a series of robustness checks with endogeneity accounted for. Further analysis excludes the possibility that a series of pernicious exercises are disguised by exporting firms' superior compliance merely as a way to avoid the risk of violating minimum wage laws. Export wage premium resulting from learning-by-exporting and supply-chain pressure from buyers are found to be the main channels through which export affects minimum wage compliance.

Key words

exports / minimum wages / export wage premium / supply-chain pressure

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Xu Helian, Zhang Yanzhe, Wang Haicheng. The Effect of Exports on Compliance with Minimum Wage Legislation[J]. The Journal of World Economy, 2020, 43(2): 99-121

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