Premium
Minimum Wage: Does it Improve Welfare in Thailand?
Author(s) -
del Carpio Ximena V.,
Messina Julián,
SanzdeGaldeano Anna
Publication year - 2019
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/roiw.12360
Subject(s) - economics , minimum wage , consumption (sociology) , poverty , labour economics , welfare , inequality , distribution (mathematics) , wage , wage inequality , income distribution , informal sector , demographic economics , economic growth , market economy , mathematical analysis , social science , mathematics , sociology
We study the causal impact of the minimum wage on labor market outcomes, household consumption, inequality and poverty in Thailand by relying on policy variation in minimum wages over time across provinces. We find that minimum‐wage increases have a large and significant impact on the likelihood of working in the uncovered sector among workers with elementary education. However, the impact is very small and insignificant among other labor market groups. In contrast, the minimum wage has large positive effects on the formal sector wages of low‐earning workers, such as the young, elderly and low educated. Increases in the minimum wage are associated with reductions in household poverty and consumption inequality at the bottom half of the distribution.