Publication:
Minimum Wage Policy and Poverty in Indonesia

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Published
2025-02-13
ISSN
0258-6770
Date
2025-02-13
Author(s)
Merdikawati, Nurina
Al Izzati, Ridho
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Abstract
This paper investigates whether the minimum wage policy significantly reduced poverty in Java Island, Indonesia, between 2002 and 2014. Its identification strategy exploits variation in minimum wages over time within pairs of geographically proximate districts. The study finds that the minimum wage has a distributional impact on wage workers just below the 20th percentile up to those in the middle of the wage distribution, with no overall loss of employment. However, the minimum wage policy has no distributional impact on per capita household expenditure and a limited effect on changes in poverty status.
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Merdikawati, Nurina; Al Izzati, Ridho. 2025. Minimum Wage Policy and Poverty in Indonesia. World Bank Economic Review. © World Bank. http://hdl.handle.net/10986/42816 License: CC BY 3.0 IGO.
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