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Minimum wages and poverty in a developing country: simulations from Indonesia’s household survey

Bird, Kelly; Manning, Chris

Description

This study focuses on the efficiency of minimum wage policy for poverty reduction, taking Indonesia as a case study. A simulation approach assesses who benefits and who pays for minimum wage increases. On the benefits side, the rise in minimum wages boosts incomes in households with low wage workers. However, increases in wage costs are passed on through higher consumer prices. As a result, three out of four poor households lose in net terms, even when we assume no job losses. The findings...[Show more]

dc.contributor.authorBird, Kelly
dc.contributor.authorManning, Chris
dc.date.accessioned2005-10-07
dc.date.accessioned2006-03-27T02:08:22Z
dc.date.accessioned2011-01-05T08:32:32Z
dc.date.available2006-03-27T02:08:22Z
dc.date.available2011-01-05T08:32:32Z
dc.date.created2005
dc.identifier.urihttp://hdl.handle.net/1885/43039
dc.identifier.urihttp://digitalcollections.anu.edu.au/handle/1885/43039
dc.description.abstractThis study focuses on the efficiency of minimum wage policy for poverty reduction, taking Indonesia as a case study. A simulation approach assesses who benefits and who pays for minimum wage increases. On the benefits side, the rise in minimum wages boosts incomes in households with low wage workers. However, increases in wage costs are passed on through higher consumer prices. As a result, three out of four poor households lose in net terms, even when we assume no job losses. The findings suggest that minimum wages are unlikely to be an effective antipoverty instrument, at least for Indonesia.
dc.format.extent244334 bytes
dc.format.extent360 bytes
dc.format.mimetypeapplication/pdf
dc.format.mimetypeapplication/octet-stream
dc.language.isoen_AU
dc.subjectpoverty
dc.subjectminimum wages
dc.subjectIndonesia
dc.subjectincome distribution
dc.titleMinimum wages and poverty in a developing country: simulations from Indonesia’s household survey
dc.typeWorking/Technical Paper
local.description.refereedno
local.identifier.citationyear2005
local.identifier.eprintid3260
local.rights.ispublishedno
dc.date.issued2005
local.contributor.affiliationEconomics, RSPAS
local.contributor.affiliationANU
local.citationin Trade and Development no.9
CollectionsANU Research Publications

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