Associate Professor Wang Tong’s Research Paper Officially Published in International Authoritative Journal Labour Economics

Recently, the research paper Labour Market Outcomes of Minimum Wage Changes: A Behavioural Perspective written by Associate Professor Wang Tong from the School of Economics at Shandong University as the sole author was officially published in Labour Economics, an international authoritative journal.

The minimum wage has long been at the core of labor market policy debates. This paper constructs a unified theoretical framework to evaluate the comprehensive impact of minimum wage increases on low-skilled and high-skilled workers in multiple dimensions such as employment, wages, work effort, labor productivity and corporate profits. The model introduces two key channels: first, the traditional wage channel, that is, with the increase of the minimum wage, the wage level of low-skilled workers increases, thereby inhibiting enterprises' demand for low-skilled labor; second, the novel effort channel, that is, the minimum wage, as the wage reference standard for low-skilled workers, leads to wage improvements that enhance workers' perception of fairness, thereby improving their work effort and labor productivity, and alleviating job losses to a certain extent. In equilibrium, enterprises provide a certain wage premium above the minimum wage to incentivize the effort of low-skilled workers, and form a wage spillover effect through the fairness perception of high-skilled workers. For low-skilled workers, the elasticity of their employment to their own wages is about -0.026, indicating that the negative employment effect brought by the minimum wage is relatively mild, and the elasticity is weakly dependent on the economic cycle. Overall, this theoretical framework highlights the interaction between multiple adjustment margins and provides a systematic analytical perspective for a comprehensive understanding of the extensive impact of minimum wage policies.

Wang Tong is an associate professor at the School of Economics at Shandong University. His research directions are macroeconomics and labor economics. His papers have been published in international authoritative academic journals such as Economic Inquiry, Macroeconomic Dynamics, and Labour Economics. He has presided over projects of the National Natural Science Foundation of China and the Natural Science Foundation of Shandong Province.