Effects of Raising Minimum Wage: Theory, Evidence and Future Challenges

Marginean, Silvia; Chenic, Alina Ştefania

doi:10.1016/s2212-5671(13)00119-6

Cited by 9 publications

(10 citation statements)

References 19 publications

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“…This policy is also forcing firms with low productivity to increase their productivity or exit from the market. While this policy may cause higher unemployment rate because higher supply of labor, several studies have shown that there is no increase in unemployment because minimum wages increases [2,3,1]. Therefore, firms must increase their cost and decrease their profit as employee structure does not change in rising minimum wages or firms may adjust their productivity to close the gap and keep profit rate unchanged [16,17].…”

Section: Quasi Experimentalmentioning

confidence: 99%

“…This policy has been implemented in many countries both in developed and developing nations. Higher wages created by this policy are expected to create more unemployment by perfect labor market mechanism, but there are many finding no negative employment effect from minimum wages policy [1]. In Indonesia case, it is also found that minimum wages policy implementation has no negative effect on employment [2,3].…”

Section: Introductionmentioning

confidence: 96%

“…To answer this hypothesis, we estimate production function following Wooldridge [12]. To measure the impact of minimum 1 Former US Director, UN World Food Program wage policy, we use difference in difference estimation; while the link is between wage and labor productivity we utilize standard panel data estimation. The results from difference-in-difference and panel data estimation used to support efficiency wages effect hypothesis.…”

Section: Introductionmentioning

confidence: 99%

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Minimum Wages, Relative Wages, and Productivity: An Empirical Analysis on Indonesia Food and Beverage Industry

Hamzah¹,

Firmansyah²,

Parewangi³

2021

ujaf

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Section: Quasi Experimentalmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 96%

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Minimum Wages, Relative Wages, and Productivity: An Empirical Analysis on Indonesia Food and Beverage Industry

Hamzah¹,

Firmansyah²,

Parewangi³

2021

ujaf

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“…Akan tetapi dalam penelitian yang dilakukan oleh Marginean and Chenic (2013) menunjukkan sedikit atau tidak ada dampak kenaikan upah minimum terhadap lapangan kerja. Begitu juga dalam penelitian Lemos (2009) yang menunjukkan bahwa kenaikan upah minimum berdampak pada distribusi upah akan tetapi tidak mempengaruhi penyerapan tenaga kerja.…”

Section: Tabel 1 Pdb Indonesia Atasunclassified

Pengaruh Upah Minimum Terhadap Penyerapan Tenaga Kerja Bidang Industri Di Indonesia

Susilowati¹,

Wahyuni

2019

EQUIL

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The minimum wages policy in Indonesia raises many pros and cons. This is due to increasing the minimum wage will have an impact on increasing the income of workers, at the same time an increase in the minimum wage adds to the burden of costs on employers. Some studies saw that increasing minimum wages policy can increase employment while other studies saw e opposite results. This study aimed to analyze the effect of minimum wages on employment in the industrial sector in Indonesia for the period 2012-2017.This study used a control variable from the supply side namely the labor force and used a quantitative approach using panel regression analysis techniques with 6 year time series data for the 2012-2017 period combined with 33 province cross section data. The results showed that the minimum wage had a negative effect on employment in the industrial sector in Indonesia for the period 2012-2017. Whereas the labor force control variable has a positive influence on employment.

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“…(Reich, Hall & Jacobs, 2003) Some other authors treat the effects of increasing the minimum wage on the following points: the impact on the overall employment and unemployment; the process of establishing a minimum level of wages depends on geographic and demographic characteristics, as well as on the territorial jurisdiction of the productive forces; relationships at different stages of the company life cycle. A rise of minimum wage does not entail any direct changes in the labour market, but at the same time there are indirect effects in other sectors (Marginean, & Chenic, 2013).…”

Section: Introductionmentioning

confidence: 99%

Problems of minimum salary in Russia

Kookueva¹

2017

The European Proceedings of Multidisciplinary Sciences

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This article highlights the issue of low-level minimum wage in Russia which is not in line with the living wage and unable to guarantee an acceptable quality of life. We conducted an investigation of some legal aspects concerning the determination of minimum wage level, its increase, its accordance with the value of consumer basket and minimum assortment. This article's main goal is to study the theoretical and legal aspects of the determination of a minimum wage in Russia including an investigation of its level dynamics and a minimum wage correlation with a living wage across the state. We used empirical research methods such as ranking, grouping, comparing in our investigation. We also used several statistical research methods (e.g. structural analysis, dynamics analysis, correlation and regression analysis). The statistical research methods helped to determine general factors of the minimum wage changes and their impact on common average income. We developed a correlation-regression model, where «y» is the size of average income per capita and variables «x1» is the size of the minimum wage, «x2» -the nominal size of the average wage, y-per capita income. Y=694,65+0,3213х1+0,7958х2. R=0.99.In the conclusion we state that the minimum wage does not exceed the cost of living, although the Constitution of the Russian Federation guarantees that it should not be less than the latter. Our investigation made it clear that a significant difference between the minimum wage, living wage and the average wage in this country leads to increased property differentiation of the population and a higher level of poverty.

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Effects of Raising Minimum Wage: Theory, Evidence and Future Challenges

Cited by 9 publications

References 19 publications

Minimum Wages, Relative Wages, and Productivity: An Empirical Analysis on Indonesia Food and Beverage Industry

Minimum Wages, Relative Wages, and Productivity: An Empirical Analysis on Indonesia Food and Beverage Industry

Pengaruh Upah Minimum Terhadap Penyerapan Tenaga Kerja Bidang Industri Di Indonesia

Problems of minimum salary in Russia

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