The Impact of Minimum Wages on Employment in a Low-Income Country: a Quasi-Natural Experiment in Indonesia
AbstractThe extensive literature on the employment impact of minimum wages has focused heavily on industrialized nations and very little on the developing world, despite the importance of minimum wages in many low-income countries. One such country, Indonesia, was the setting for an unusual quasi-natural experiment: not only did minimum wages in Indonesia increase sharply between 1990 and 1996, but the resultant increment in average wages varied markedly across different areas in Greater Jakarta. The authors use household-level labor market data to determine the extent of compliance with the legislation, then estimate the employment impact in the clothing, textiles, footwear, and leather industries based on a census of all large and medium-sized establishments. The evidence suggests that there was no negative employment impact for large establishments, either foreign or domestic, but that workers in smaller, domestic establishments may have suffered job losses as a result of minimum wage increases.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by ILR Review, Cornell University, ILR School in its journal ILR Review.
Volume (Year): 61 (2008)
Issue (Month): 2 (January)
Postal: 381 Ives East, Cornell University, Ithaca, NY 14853-3901
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- David Neumark & William Wascher, 2006.
"Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research,"
NBER Working Papers
12663, National Bureau of Economic Research, Inc.
- David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," Working Papers 060708, University of California-Irvine, Department of Economics, revised Jan 2007.
- Sen, Anindya & Rybczynski, Kathleen & Van De Waal, Corey, 2011. "Teen employment, poverty, and the minimum wage: Evidence from Canada," Labour Economics, Elsevier, vol. 18(1), pages 36-47, January.
- Magruder, Jeremy R., 2013. "Can minimum wages cause a big push? Evidence from Indonesia," Journal of Development Economics, Elsevier, vol. 100(1), pages 48-62.
- Kis-Katos, Krisztina & Sparrow, Robert, 2009.
"Child Labor and Trade Liberalization in Indonesia,"
IZA Discussion Papers
4376, Institute for the Study of Labor (IZA).
- Haryo Aswicahyono & Chris Manning, 2011. "Exports and Job Creation in Indonesia Before and After the Asian Financial Crisis," Departmental Working Papers 2011-11, The Australian National University, Arndt-Corden Department of Economics.
- Eva Lajtkepová, 2010. "Minimum Wage and Labour Market," Acta Oeconomica Pragensia, University of Economics, Prague, vol. 2010(1), pages 3-20.
- Del Carpio, Ximena & Nguyen, Ha & Wang, Liang Choon, 2012. "Does the minimum wage affect employment ? evidence from the manufacturing sector in Indonesia," Policy Research Working Paper Series 6147, The World Bank.
- Del Carpio, Ximena & Messina, Julián & Sanz-de-Galdeano, Anna, 2014. "Minimum Wage: Does It Improve Welfare in Thailand?," IZA Discussion Papers 7911, Institute for the Study of Labor (IZA).
- Papps, Kerry L., 2011.
"The Effects of Social Security Taxes and Minimum Wages on Employment: Evidence from Turkey,"
IZA Discussion Papers
6214, Institute for the Study of Labor (IZA).
- Kerry L. Papps, 2012. "The Effects of Social Security Taxes and Minimum Wages on Employment: Evidence from Turkey," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 65(3), pages 686-707, July.
- Kerry Papps, 2010. "The Effects of Social Security Taxes and Minimum Wages on Employment: Evidence from Turkey," KoÃ§ University-TUSIAD Economic Research Forum Working Papers 1017, Koc University-TUSIAD Economic Research Forum.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (ILR Review).
If references are entirely missing, you can add them using this form.