The Regional Economics Applications Laboratory
Announces a Seminar by:

Daniel Halim

Ph.D Student - Dept. of Economics

 "Querying the perverse incentive of minimum wage on education: evidence from Indonesia"




Davenport Hall


Abstract: Minimum wage policy in Indonesia was found to have positive overall employment effect with displaced workers substituting into informal sector. The first effect appears to increase both expected earning and probability of getting a job, and thus, the opportunity cost to schooling. The second effect appears to undermine the necessity of schooling. Both effects seem to suggest that educational attainment should be negatively affected with increasing minimum wage. Using Indonesian longitudinal survey of individuals age 12-24 from 1990-2007, I found that enrollment was not adversely affected as consequentially predicted. Empirical approach employs a difference-in-difference framework exploiting variation of minimum wage policies across time and provinces. .
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