Policy Effects of the Statutory Minimum Wage in Hong Kong: Evidence from the General Household Survey from 2011 to 2019

This article examines the policy effects of Hong Kong’s Statutory Minimum Wage (SMW) on underemployment, working hours, and wages. Using a Difference-in-Differences methodology on General Household Survey data (2011–2019), we assess five SMW adjustment cycles. We define a ‘most disadvantaged’ treatment group and a ‘less disadvantaged’ group based on the concentration of minimum wage earners in their industry-occupation cell, relative to an unaffected control group. Our findings show no significant increase in underemployment or reduction in working hours for either group. Wage effects were also contained, with inconsistent direct gains for the most disadvantaged group and no evidence of significant wage spillovers for the ‘less disadvantaged’ group. These findings indicate that the SMW and its adjustments in Hong Kong did not lead to the feared wage-job trade-off constraints; instead, they highlight the need to explore policy options for appropriate SMW increases to reduce economic inequality.