Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/152410
Authors: 
Hohberg, Maike
Lay, Jann
Year of Publication: 
2015
Citation: 
[Journal:] IZA Journal of Labor & Development [ISSN:] 2193-9020 [Volume:] 4 [Year:] 2015 [Issue:] 14 [Pages:] 1-25
Abstract: 
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.
Subjects: 
Minimum wages
Employment effects
Informal sector
Wage spillover effects
JEL: 
J08
J46
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/4.0/
Document Type: 
Article
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