How Does Decentralised Minimum-Wage Setting Affect Unemployment and Informality?: The Case of Indonesia
The Indonesian labour market is characterised by widespread informality. To some extent, these outcomes can be attributed to a sharp increase in the real value of the minimum wage since 2001, when minimum-wage setting was decentralised to the provincial governments. To test this hypothesis, this pap...
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| Format: | Elektronisch E-Book |
| Sprache: | English |
| Veröffentlicht: |
Paris
OECD Publishing
2009
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| Schriftenreihe: | OECD Economics Department Working Papers
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| Online-Zugang: | kostenfrei |
| Zusammenfassung: | The Indonesian labour market is characterised by widespread informality. To some extent, these outcomes can be attributed to a sharp increase in the real value of the minimum wage since 2001, when minimum-wage setting was decentralised to the provincial governments. To test this hypothesis, this paper uses survey data on the labour market (Sakernas), household income and expenditure (Susenas) and the industrial sector (Survei Industri) to construct a district-level dataset spanning the period 1996 to 2004. The effects of changes in the minimum wage on unemployment, formal-sector employment and the incidence of informality in urban areas are estimated separately by fixed effects and jointly by a seemingly unrelated regression (SUR) estimator. Our findings show that an increase in the minimum-to-mean wage ratio is associated with a net increase in employment: a rise in informal-sector employment more than compensates for job losses in the formal sector. This Working Paper relates to the 2008 OECD Economic Assessment of Indonesia (www.oecd.org/eco/surveys/indonesia) |
| Beschreibung: | 1 Online-Ressource (26 Seiten) 21 x 29.7cm |
| DOI: | 10.1787/222850046464 |
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| spelling | Comola, Margherita Verfasser aut How Does Decentralised Minimum-Wage Setting Affect Unemployment and Informality? The Case of Indonesia Margherita Comola and Luiz de Mello = Comment la décentralisation de la fixation du salaire minimum affecte le chômage et l'informalité ? L'expérience de l'Indonésie / Margherita Comola et Luiz de Mello Comment la décentralisation de la fixation du salaire minimum affecte le chômage et l'informalité ? L'expérience de l'Indonésie Paris OECD Publishing 2009 1 Online-Ressource (26 Seiten) 21 x 29.7cm txt rdacontent c rdamedia cr rdacarrier OECD Economics Department Working Papers The Indonesian labour market is characterised by widespread informality. To some extent, these outcomes can be attributed to a sharp increase in the real value of the minimum wage since 2001, when minimum-wage setting was decentralised to the provincial governments. To test this hypothesis, this paper uses survey data on the labour market (Sakernas), household income and expenditure (Susenas) and the industrial sector (Survei Industri) to construct a district-level dataset spanning the period 1996 to 2004. The effects of changes in the minimum wage on unemployment, formal-sector employment and the incidence of informality in urban areas are estimated separately by fixed effects and jointly by a seemingly unrelated regression (SUR) estimator. Our findings show that an increase in the minimum-to-mean wage ratio is associated with a net increase in employment: a rise in informal-sector employment more than compensates for job losses in the formal sector. This Working Paper relates to the 2008 OECD Economic Assessment of Indonesia (www.oecd.org/eco/surveys/indonesia) Economics Indonesia de Mello, Luiz ctb https://doi.org/10.1787/222850046464 Verlag kostenfrei Volltext |
| spellingShingle | Comola, Margherita How Does Decentralised Minimum-Wage Setting Affect Unemployment and Informality? The Case of Indonesia Economics Indonesia |
| title | How Does Decentralised Minimum-Wage Setting Affect Unemployment and Informality? The Case of Indonesia |
| title_alt | Comment la décentralisation de la fixation du salaire minimum affecte le chômage et l'informalité ? L'expérience de l'Indonésie |
| title_auth | How Does Decentralised Minimum-Wage Setting Affect Unemployment and Informality? The Case of Indonesia |
| title_exact_search | How Does Decentralised Minimum-Wage Setting Affect Unemployment and Informality? The Case of Indonesia |
| title_exact_search_txtP | How Does Decentralised Minimum-Wage Setting Affect Unemployment and Informality? The Case of Indonesia |
| title_full | How Does Decentralised Minimum-Wage Setting Affect Unemployment and Informality? The Case of Indonesia Margherita Comola and Luiz de Mello = Comment la décentralisation de la fixation du salaire minimum affecte le chômage et l'informalité ? L'expérience de l'Indonésie / Margherita Comola et Luiz de Mello |
| title_fullStr | How Does Decentralised Minimum-Wage Setting Affect Unemployment and Informality? The Case of Indonesia Margherita Comola and Luiz de Mello = Comment la décentralisation de la fixation du salaire minimum affecte le chômage et l'informalité ? L'expérience de l'Indonésie / Margherita Comola et Luiz de Mello |
| title_full_unstemmed | How Does Decentralised Minimum-Wage Setting Affect Unemployment and Informality? The Case of Indonesia Margherita Comola and Luiz de Mello = Comment la décentralisation de la fixation du salaire minimum affecte le chômage et l'informalité ? L'expérience de l'Indonésie / Margherita Comola et Luiz de Mello |
| title_short | How Does Decentralised Minimum-Wage Setting Affect Unemployment and Informality? |
| title_sort | how does decentralised minimum wage setting affect unemployment and informality the case of indonesia |
| title_sub | The Case of Indonesia |
| topic | Economics Indonesia |
| topic_facet | Economics Indonesia |
| url | https://doi.org/10.1787/222850046464 |
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