Minimum Wage and Crime: Evidence from China

This study employs microlevel crime data from Chinese judgment documents and empirically analyzes the impact of minimum wage adjustments on public safety. During the sample period of 2014–2018, the findings indicate that minimum wage increases significantly reduced the likelihood of committing a property crime, especially for younger age groups. Specifically, for a 1% increase in the minimum wage, there was a decrease in theft crime rates by 0.296%. We do not find any significant effect on violent crime. Such a reduction in crime rates reduces the social cost by at least 1.18 billion yuan. Further analysis of the potential mechanism on the basis of data drawn from the China Household Income Project reveals that the income effect caused by the minimum wage adjustments during the sample period outweighs the employment-squeezing effect, thereby increasing individual crime costs and reducing crime propensity. Our study provides a comprehensive understanding of the social welfare effect of the minimum wage system in improving employment quality and stabilizing public safety.