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Minimum Wage: Does It Improve Welfare in Thailand?

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Author Info

  • Del Carpio, Ximena

    ()
    (World Bank)

  • Messina, Julián

    ()
    (World Bank)

  • Sanz-de-Galdeano, Anna

    ()
    (Universitat Autònoma de Barcelona)

Abstract

We study the causal impact of the minimum wage on employment and welfare in Thailand using a difference-in-difference approach that relies on exogenous policy variation in minimum wages across provinces. We find that minimum-wage increases have small disemployment effects on female, elderly, and less-educated workers and large positive effects on the wages of prime-age male workers. As such, increases in the minimum wage are associated with increases in household consumption per capita in general, but the consumption increase is greatest among those households around the median of the distribution. In fact, rises in the minimum wage increased inequality in consumption per capita within the bottom half of the distribution.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7911.

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Length: 32 pages
Date of creation: Jan 2014
Date of revision:
Handle: RePEc:iza:izadps:dp7911

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Keywords: minimum wage; household consumption; poverty; employment; uncovered sector;

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References

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  1. Margherita Comola & Luiz De Mello, 2011. "How Does Decentralized Minimum Wage Setting Affect Employment And Informality? The Case Of Indonesia," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 57, pages S79-S99, 05.
  2. Rama, Martin, 1996. "The consequences of doubling the minimum wage : the case of Indonesia," Policy Research Working Paper Series 1643, The World Bank.
  3. 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.
  4. Richard Dickens & Stephen Machin & Alan Manning, 1994. "The Effects of Minimum Wages on Employment: Theory and Evidence from Britain," CEP Discussion Papers dp0183, Centre for Economic Performance, LSE.
  5. 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.
  6. Vivi Alatas & Lisa A. Cameron, 2008. "The Impact of Minimum Wages on Employment in a Low-Income Country: a Quasi-Natural Experiment in Indonesia," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 61(2), pages 201-223, January.
  7. Nguyen Viet, Cuong, 2010. "The Impact of a Minimum Wage Increase on Employment, Wages and Expenditures of Low-Wage Workers in Vietnam," MPRA Paper 36751, University Library of Munich, Germany, revised 15 Aug 2011.
  8. David Neumark & William L. Wascher, 2008. "Minimum Wages," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262141027, December.
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