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Minimum Wage: Does it Improve Welfare in Thailand?

Author

Listed:
  • Ximena V. del Carpio
  • Julián Messina
  • Anna Sanz‐de‐Galdeano

Abstract

We study the causal impact of the minimum wage on labor market outcomes, household consumption, inequality and poverty in Thailand by relying on policy variation in minimum wages over time across provinces. We find that minimum‐wage increases have a large and significant impact on the likelihood of working in the uncovered sector among workers with elementary education. However, the impact is very small and insignificant among other labor market groups. In contrast, the minimum wage has large positive effects on the formal sector wages of low‐earning workers, such as the young, elderly and low educated. Increases in the minimum wage are associated with reductions in household poverty and consumption inequality at the bottom half of the distribution.

Suggested Citation

  • Ximena V. del Carpio & Julián Messina & Anna Sanz‐de‐Galdeano, 2019. "Minimum Wage: Does it Improve Welfare in Thailand?," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 65(2), pages 358-382, June.
    • Handle: RePEc:bla:revinw:v:65:y:2019:i:2:p:358-382
    DOI: 10.1111/roiw.12360
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    Cited by:

    1. Samutpradit, Saisawat, 2024. "Employment effects of minimum wages in a dual economy: Evidence from Thailand," Journal of Development Economics, Elsevier, vol. 168(C).
    2. Robayo,Monica & Terskaya,Anastasia & Koettl-Brodmann,Stefanie, 2020. "Ex-ante Evaluation of the Impact of Increases in Minimum Wages on Labor Market Outcomes in Kosovo," Policy Research Working Paper Series 9357, The World Bank.
    3. Stijn Broecke & Alessia Forti & Marieke Vandeweyer, 2017. "The effect of minimum wages on employment in emerging economies: a survey and meta-analysis," Oxford Development Studies, Taylor & Francis Journals, vol. 45(3), pages 366-391, July.
    4. Neumark, David & Munguía Corella, Luis Felipe, 2021. "Do minimum wages reduce employment in developing countries? A survey and exploration of conflicting evidence," World Development, Elsevier, vol. 137(C).
    5. Démurger, Sylvie & Lin, Carl & Schmillen, Achim & Wang, Dewen, 2026. "Falling into poverty or escaping from it? The effect of the minimum wage in urban China," World Development, Elsevier, vol. 198(C).
    6. Kenn Ariga, 2016. "Minimum wage through the looking glass," KIER Working Papers 927, Kyoto University, Institute of Economic Research.
    7. Raymundo M. Campos-Vazquez & Gerardo Esquivel, 2023. "The Effect of the Minimum Wage on Poverty: Evidence from a Quasi-Experiment in Mexico," Journal of Development Studies, Taylor & Francis Journals, vol. 59(3), pages 360-380, March.
    8. Işık Enes & Orhangazi Özgür & Tekgüç Hasan, 2020. "Heterogeneous effects of minimum wage on labor market outcomes: A case study from Turkey," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 10(1), pages 1-41, March.
    9. Zhao, Fan & Li, Ruirui & Wu, Ziyin & Ru, Xue, 2025. "Can the integration of digital and real economies stimulate residents' consumption?," International Review of Financial Analysis, Elsevier, vol. 103(C).
    10. Eliana Carranza & William David Wiseman & Andreas Eberhard-Ruiz & Ana Lucia Cardenas Martinez, 2022. "Colombia Jobs Diagnostic [Colombia Diagnóstico de Empleo]," World Bank Publications - Reports 37403, The World Bank Group.
    11. Robayo, Monica & Zamfir,Madalina & Wronski,Marcin, 2024. "Simulating Aggregate and Distributional Effects of Minimum Wage Increases in Romania : Evidence from Survey and Administrative Tax Data," Policy Research Working Paper Series 10934, The World Bank.
    12. Nidhiya Menon & Yana van der Meulen Rodgers, 2017. "The Impact of the Minimum Wage on Male and Female Employment and Earnings in India," Asian Development Review, MIT Press, vol. 34(1), pages 28-64, March.
    13. Wannaphong Durongkaveroj, 2017. "Minimum Wage and Lives of the Poor: Evidence from Thailand," PIER Discussion Papers 76, Puey Ungphakorn Institute for Economic Research.
    14. Wiggins, Steve & Keats, Sharada, 2015. "Rural Wages in Asia," 2015 Conference, August 9-14, 2015, Milan, Italy 212615, International Association of Agricultural Economists.
    15. Wannaphong Durongkaveroj, 2022. "Does the minimum wage improve the welfare of workers? Evidence from the 2013 minimum wage reform in Thailand," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 36(2), pages 52-70, November.
    16. Mr. Christopher S Adam & Mr. Edward F Buffie, 2020. "The Minimum Wage Puzzle in Less Developed Countries: Reconciling Theory and Evidence," IMF Working Papers 2020/023, International Monetary Fund.
    17. Zhao, Yueyang & Mao, Jinzhou, 2022. "Energy effects of non-energy policies: Minimum wage standard and enterprise energy efficiency in China," Resources Policy, Elsevier, vol. 79(C).

    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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