Abstract
Raising the minimum wage may have unintended negative consequences for workers. In South Korea, employers are required to contribute towards their employees’ social insurance, with the amount proportional to earnings. However, workers employed for less than 60 h per month are exempt from this contribution requirement. Using administrative payroll records from 2011 to 2019, we find that raising the minimum wage results in a higher share of the exempt workers. Our results remain robust when focusing on unanticipated hikes in the minimum wage in 2018 and 2019.