Minimum Wage: Does it Improve Welfare in Thailand?

25 Pages Posted: 11 May 2019

See all articles by Ximena V. Del Carpio

Ximena V. Del Carpio

World Bank - Independent Evaluation Group

Julian Messina

Inter-American Development Bank (IDB) - Research Department

Anna Sanz‐de‐Galdeano

Universidad de Alicante

Multiple version iconThere are 2 versions of this paper

Date Written: June 2019

Abstract

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.

Keywords: employment, inequality, minimum wage, poverty, uncovered sector

Suggested Citation

Del Carpio, Ximena V. and Messina, Julian and Sanz‐de‐Galdeano, Anna, Minimum Wage: Does it Improve Welfare in Thailand? (June 2019). Review of Income and Wealth, Vol. 65, Issue 2, pp. 358-382, 2019. Available at SSRN: https://ssrn.com/abstract=3385032 or http://dx.doi.org/10.1111/roiw.12360

Ximena V. Del Carpio (Contact Author)

World Bank - Independent Evaluation Group ( email )

Washington, DC 20433
United States

Julian Messina

Inter-American Development Bank (IDB) - Research Department ( email )

1300 New York Ave., NW
Washington, DC 20577
United States

Anna Sanz‐de‐Galdeano

Universidad de Alicante ( email )

Campus de San Vicente
Carretera San Vicente del Raspeig
San Vicente del Raspeig, Alicante 03690
Spain

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