Minimum Wage: Does it Improve Welfare in Thailand?

32 Pages Posted: 1 Feb 2014

See all articles by Ximena V. Del Carpio

Ximena V. Del Carpio

World Bank - Independent Evaluation Group

Julian Messina

World Bank

Anna Sanz-de-Galdeano

Universitat Autònoma de Barcelona; IZA Institute of Labor Economics

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Abstract

We study the causal impact of the minimum wage on employment and welfare in Thailand using a difference-in-difference approach that relies on exogenous policy variation in minimum wages across provinces. We find that minimum-wage increases have small disemployment effects on female, elderly, and less-educated workers and large positive effects on the wages of prime-age male workers. As such, increases in the minimum wage are associated with increases in household consumption per capita in general, but the consumption increase is greatest among those households around the median of the distribution. In fact, rises in the minimum wage increased inequality in consumption per capita within the bottom half of the distribution.

Keywords: minimum wage, household consumption, poverty, employment, uncovered sector

JEL Classification: J31, D31

Suggested Citation

Del Carpio, Ximena V. and Messina, Julián and Sanz De Galdeano, Anna, Minimum Wage: Does it Improve Welfare in Thailand?. IZA Discussion Paper No. 7911. Available at SSRN: https://ssrn.com/abstract=2389259

Ximena V. Del Carpio (Contact Author)

World Bank - Independent Evaluation Group ( email )

Washington, DC 20433
United States

Julián Messina

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Anna Sanz De Galdeano

Universitat Autònoma de Barcelona ( email )

Edifici B - Campus Bellaterra
Barcelona, 08193
Spain

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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