Minimum Wage Policy And Its Impact On Employment In The Urban Formal Sector
AbstractSince the late 1980s, minimum wages have become an important plank of the Indonesian government's labour policy. Their levels have increased faster in real terms than those of average wages and per capita gross domestic product and, as a result, minimum wages have become binding for the majority of formal sector workers. This study finds that the imposition of minimum wages has a negative and statistically significant impact on employment in the urban formal sector. The disemployment impact is greatest for female, young and less educated workers, while the employment prospects of white-collar workers are enhanced by increases in minimum wages. Some workers who lose jobs in the formal sector and have to relocate to the informal sector face lower earnings and poorer working conditions.
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Bulletin of Indonesian Economic Studies.
Volume (Year): 39 (2003)
Issue (Month): 1 ()
Contact details of provider:
Web page: http://www.tandfonline.com/CBIE20
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Krisztina Kis-Katos & Robert Sparrow, 2011.
"Child Labor and Trade Liberalization in Indonesia,"
Journal of Human Resources,
University of Wisconsin Press, vol. 46(4), pages 722-749.
- Hada Soesastro & Haryo Aswicahyono & Dionisius A. Narjoko, 2007.
"Economic Reforms in Indonesia After The 1997/98 Economic Crisis,"
EABER Working Papers
21861, East Asian Bureau of Economic Research.
- Hadi Soesastro & Haryo Aswicahyono & Dionisius A. Narjoko, 2006. "Economic Reforms in Indonesia after the 1997/98 Economic Crisis," EABER Working Papers 21831, East Asian Bureau of Economic Research.
- 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.
- David Neumark & William Wascher, 2006.
"Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research,"
060708, University of California-Irvine, Department of Economics, revised Jan 2007.
- 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.
- Armida Alisjahbana & Chris Manning, 2006. "Labour market dimensions of poverty in Indonesia," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 42(2), pages 235-261.
- Paul Conway & Sean Dougherty & Artur Radziwill, 2010. "Long-term growth and policy challenges in the large emerging economies," OECD Economics Department Working Papers 755, OECD Publishing.
- Aswicahyono, Haryo & Bird, Kelly & Hill, Hal, 2009. "Making Economic Policy in Weak, Democratic, Post-crisis States: An Indonesian Case Study," World Development, Elsevier, vol. 37(2), pages 354-370, February.
- Armand A Sim & Daniel Suryadarma & Asep Suryahadi, 2011. "The Consequences of Child Market Work on the Growth of Human Capital," Departmental Working Papers 2011-10, The Australian National University, Arndt-Corden Department of Economics.
- Margherita Comola & Luiz De Mello, 2010. "Educational attainment and selection into the labour market: The determinants of employment and earnings in Indonesia," Working Papers halshs-00564835, HAL.
- Lloyd Kenward, 2004. "Survey of recent developments," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 40(1), pages 9-35.
- Chaudhuri, Sarbajit & Mukhopadhyay, Ujjaini, 2009. "Revisiting the Informal Sector: A General Equilibrium Approach," MPRA Paper 52135, University Library of Munich, Germany.
- Aloysius Gunadi Brata, 2004. "Spatial Dynamic Of Small And Medium Enterprises In The Recent Economic Crisis," Urban/Regional 0409003, EconWPA.
- Kelly Bird & Chris Manning, 2005.
"Minimum Wages and Poverty in a Developing Country: Simulations from Indonesia's Household Survey,"
Departmental Working Papers
2005-09, The Australian National University, Arndt-Corden Department of Economics.
- Bird, Kelly & Manning, Chris, 2008. "Minimum Wages and Poverty in a Developing Country: Simulations from Indonesia's Household Survey," World Development, Elsevier, vol. 36(5), pages 916-933, May.
- Margherita Comola & Luiz de Mello, 2009. "How Does Decentralised Minimum-Wage Setting Affect Unemployment and Informality?: The Case of Indonesia," OECD Economics Department Working Papers 710, OECD Publishing.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.