Effects of Minimum Wage Hikes on the Formalization of Employment

Despite the intention of minimum wage policy to maintain the living standards of low-income groups in the formal sector, this paper has found that the actual result of this policy produces the ＂big push＂ impact on China＇s economy under certain conditions, i.e. it is conducive to achieving the equilibrium of high wage, high consumption and formalization. The result shows that the elasticity of income growth from raising the minimum wage standard is greater for formal sector employees than for informal sector employees and is characterized by a U-shaped pattern in terms of quantiles. Thus, minimum wage hikes have widened wage gaps between and within sectors. Rising minimum wage standards greatly stimulate consumption with each 10% increase expected to bring about an additional urban household consumption of about 1.167 billion yuan in the surveyed four provinces. With local minimum wage hikes, the formal sector of wholesale and retail, hotel and catering services expands and the informal sector contracts, while the real estate sector experiences a ＂reverse formalization＂ trend. Based on the ＂big push theory＂, this paper concludes that against the backdrop of extensive, frequent and substantial minimum wage hikes, demand and sector TFP growth are the major causes of sector heterogeneity.

Cultural and Creative Industries:New Engine for Economic Growth

CULTURAL and creative industries（CCI）are regarded as a positive force in promoting consumption,international trade,and employment,and also for strengthening social cohesion.This is because the CCI feature strong industrial integration,high added value,and are environment-friendly.

Employment Structure,Lewis Turning Point and the Labor Share of Income:Theoretical and Empirical Analysis

In the context of the labor market segmentation in China and its reaching the Lewis turning point,this paper interprets the changing trend of the labor share of income in China from the changing perspective of the employment ownership structure.The theoretical analysis reveals that the labor share of income follows a U-shaped curve when the agricultural labor force gradually moves into the private and self-employed sectors.Using the Chinese provincial-level panel dataset between 1990 and 2016,our empirical study finds that there is a critical threshold.When the share of agricultural labor force is above this threshold value,the impact of the increase in the employment share of the urban private sector on the labor share of income is negative.In contrast,the impact becomes positive when the share of the agricultural labor force is less than or equal to this threshold value.Moreover,the impacts of other variables of employment ownership structure don’t show this kind of feature on both sides of this threshold value.The increase in the employment share of the urban private sector accounted for about 29.37%of the growing labor share of income between 2007 and 2016.This paper provides policy implications in the following four areas:institutional guarantee improvement,harmonious labor relations establishment,redistribution policy imposition and economic development pattern transformation.