The impact of minimum wages on employment in a low income country : an evaluation using the difference-differences approach
AbstractUnlike the well-developed literature on the employment impact of the minimum wage in industrial nations, very little is known about minimum wage effects in low income countries. Minimum wages increased sharply in Indonesia between 1990 and 1996 and by more in some provinces than in others. Following Card and Krueger (1994) the authors exploit the large geographic variation in the rate of increase and compare changes in employment in the clothing, textile, footwear, and leather industries on either side of the Jakarta-West Java border. They use household level labor market data to establish compliance with the legislation. They obtain matched difference-in-difference estimates of the employment impact using a census of all large and medium-size firms in the clothing, textile, leather, and footwear industries. The authors find some evidence of a negative employment impact for small, domestic firms but no employment impact for large firms, foreign or domestic.
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 InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 2985.
Date of creation: 31 Mar 2003
Date of revision:
Environmental Economics&Policies; Banks&Banking Reform; Public Health Promotion; Labor Policies; Municipal Financial Management; Environmental Economics&Policies; Banks&Banking Reform; Child Labor; Municipal Financial Management; Health Monitoring&Evaluation;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-08-16 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jonathan Gruber, 1995.
"The Incidence of Payroll Taxation: Evidence from Chile,"
NBER Working Papers
5053, National Bureau of Economic Research, Inc.
- Gruber, Jonathan, 1997. "The Incidence of Payroll Taxation: Evidence from Chile," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages S72-101, July.
- Harrison, Ann E & Leamer, Edward, 1997. "Labor Markets in Developing Countries: An Agenda for Research," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages S1-19, July.
- Rama, Martin, 1996.
"The consequences of doubling the minimum wage : the case of Indonesia,"
Policy Research Working Paper Series
1643, The World Bank.
- Martφn Rama, 2001. "The Consequences of doubling the minimum wage: The case of Indonesia," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 54(4), pages 864-881, July.
- Alida Castillo Freeman & Richard B. Freeman, 1991. "Minimum Wages in Puerto Rico: Textbook Case of a Wage Floor?," NBER Working Papers 3759, National Bureau of Economic Research, Inc.
- Pierre, Gaelle & Scarpetta, Stefano, 2007. "How labor market policies can combine workers'protection with job creation : a partial review of some key issues and policy options," Social Protection Discussion Papers 41439, The World Bank.
- Giovanni Immordino, 2003. "Fairness, NGO Activism and the Welfare of Less Developed Countries," CSEF Working Papers 101, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy, revised 09 Dec 2007.
- Harrison, Ann & Scorse, Jason, 2005. "Improving the conditions of workers? Minimum wage legilsation and anit-sweatshop activism," MPRA Paper 36276, University Library of Munich, Germany.
- Pierre, Gaëlle & Scarpetta, Stefano, 2004.
"Employment Regulations through the Eyes of Employers: Do They Matter and How Do Firms Respond to Them?,"
IZA Discussion Papers
1424, Institute for the Study of Labor (IZA).
- Pierre, Gaelle & Scarpetta, Stefano, 2004. "Employment regulations through the eyes of employers - do they matter and how do firms respond to them?," Policy Research Working Paper Series 3463, The World Bank.
- 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.
- Amiti, Mary & Konings, Jozef, 2005.
"Trade Liberalization, Intermediate Inputs and Productivity: Evidence from Indonesia,"
CEPR Discussion Papers
5104, C.E.P.R. Discussion Papers.
- Mary Amiti & Jozef Konings, 2007. "Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia," American Economic Review, American Economic Association, vol. 97(5), pages 1611-1638, December.
- Amiti, M. & Konings, Joep, 2007. "Trade liberalization, intermediate inputs, and productivity: evidence from Indonesia," Open Access publications from Katholieke Universiteit Leuven urn:hdl:123456789/197555, Katholieke Universiteit Leuven.
- Mary Amiti & Jozef Konings, 2005. "Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia," IMF Working Papers 05/146, International Monetary Fund.
- Stephen Devereux, 2005. "Can minimum wages contribute to poverty reduction in poor countries?," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(7), pages 899-912.
- Lisa A. Cameron & Mary Amiti, 2004.
"Economic Geography and Wages,"
Econometric Society 2004 Australasian Meetings
253, Econometric Society.
- Chris Manning, 2004. "Legislating for Labour Protection: Betting on the Weak or the Strong?," Departmental Working Papers 2004-08, The Australian National University, Arndt-Corden Department of Economics.
- Mary Amiti & Lisa Ann Cameron, 2004. "Economic Geography and Wages: The Case of Indonesia," IMF Working Papers 04/79, International Monetary Fund.
- Ann Harrison & Jason Scorse, 2004. "Moving Up or Moving Out? Anti-Sweatshop Activists and Labor Market Outcomes," NBER Working Papers 10492, National Bureau of Economic Research, Inc.
- 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.
- Harrison, Ann & Scorse, Jason, 2003. "Globalization's impact on compliance with labor standards," MPRA Paper 36450, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.