| Summary: | 碩士 === 國立臺北大學 === 財政學系 === 101 === The minimum wage has political, economic, social and moral dimensions and has caused a lot of discussion. It also involves the opposing interests of the employer and the employee. In addition, the demand for foreign workers in Taiwan is increasing year by year. Therefore, this paper compares the size of rent in labor market before and after the policy was adjusted to analyze the effects of the minimum wage on Taiwan's labor market. We use Pissarides (2009) DMP model as theoretical structure and do the comparative static analysis after introducing the variable of minimum wage into the model. Due to the data limitations, we use the data from 1996 Q1 to 2006 Q4 and utilize Generalized Method of Moments (GMM) to estimate the parameters of the DMP model. Setting 1997 Q3 as the dividing point, we compare two cases of labor rent: “domestic and foreign labor market” and “domestic labor market”, before and after the minimum wage was changed. The results are that both two cases lead to rent dissipation, and the latter case has caused larger rent dissipation. The outcome indicates that when the domestic labors and the foreign labors are substitute, firms prefer to hire foreign workers in our country.
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