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Determinants Of School Enrolment In Indonesia: The Role Of Minimum Wage

Author

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  • Dyah Savitri Pritadrajati

    (Australian National University)

Abstract

This paper investigates the role of minimum wages in determining school enrolment (educational investment) in Indonesia using the National Socioeconomic Survey (Susenas). It finds that minimum wage legislation has a negative and significant substitution efect on educational investment. Individuals are more likely to drop out of senior secondary school as a result of a minimum wage legislation. Even though the response among low-income households is positive, this result may be generated by a fall in the probability of obtaining low-skilled employment, which ofset the substitution efect.

Suggested Citation

  • Dyah Savitri Pritadrajati, 2021. "Determinants Of School Enrolment In Indonesia: The Role Of Minimum Wage," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 24(2), pages 181-204, June.
    • Handle: RePEc:idn:journl:v:24:y:2021:i:2b:p:181-204
    DOI: https://doi.org/10.21098/bemp.v24i2.1484
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    More about this item

    Keywords

    Minimum wage; Human capital investment; School enrolment;
    All these keywords.

    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy

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