The impact of minimum wages on informal and formal labor market outcomes: evidence from Indonesia

DEU 2018-02-27T08:55:02Z 2018-02-27T08:55:02Z 2015

This paper studies the effects of minimum wages on informal and formal sector wages and employment in Indonesia between 1997 and 2007. Applying fixed-effects methods, the estimates suggest that minimum wages have a significant positive effect on formal sector wages, while there are no spillover effects on informal workers. Regarding employment, we find no statistically significant negative effects of minimum wages on the probability of being formally employed. These findings suggest that employers use adjustment channels other than employment or that effects such as a demand stimulus on a local level outweigh the possible negative employment effects.

Sozialwissenschaften, Soziologie; Wirtschaft; Social sciences, sociology, anthropology; Economics; Indonesian; Familiy Life Survey; IFLS; Einkommenspolitik, Lohnpolitik, Tarifpolitik, Vermögenspolitik; Arbeitsmarktpolitik; Income Policy, Property Policy, Wage Policy; Labor Market Policy; Arbeit; Beschäftigung; Indonesien; Mindesteinkommen; Mindestlohn; informeller Sektor; politisches Instrument; Lebensstandard; Entwicklungsland; Lebenshaltung; Kosten; Lohnpolitik; Einkommenspolitik; Arbeitsmarkt; Modell; Beschäftigungspolitik; Beschäftigungseffekt; labor; employment; Indonesia; minimum income; minimum wage; informal sector; political instrument; standard of living; developing country; living standard; costs; wage policy; incomes policy; labor market; model; employment policy; labor market policy; effect on employment; 10500; Zeitschriftenartikel; journal article

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DEGES oai:gesis.izsoz.de:document/56102
2193-9020
urn:nbn:de:0168-ssoar-56102-3
1256784988

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