Do minimum wages affect employment? Evidence from the manufacturing sector in Indonesia

IZA Journal of Labor & Development

Table 3 Employment effects of min. wages on non- prod. workers

Dependent variable: Log (Number of paid non-production workers)
	All firms		Small firms		Large firms
	(1)	(2)	(3)	(4)	(5)	(6)
Log (Min. Wage)	−0.0615***	−0.0554**	−0.0649***	−0.0779***	0.0105	0.0635
	(0.0206)	(0.0250)	(0.0213)	(0.0263)	(0.0409)	(0.0494)
Log (Firm Age)		0.1942***		0.0954***		0.2516***
		(0.0098)		(0.0100)		(0.0210)
Foreign Share		0.0012***		0.0017***		0.0000
		(0.0003)		(0.0004)		(0.0004)
Export Share		0.0007***		0.0006***		0.0003**
		(0.0001)		(0.0001)		(0.0001)
Govt. Share		0.0007**		0.0007***		0.0003
		(0.0003)		(0.0002)		(0.0004)
Fixed Effects	Firm	Firm	Firm	Firm	Firm	Firm
Year Effects	Yes	Yes	Yes	Yes	Yes	Yes
Observations	245,963	168,741	179,746	121,950	64,414	45,568
Number of firms	36,893	34,504	31,821	29,389	9159	8762
R-squared	0.873	0.876	0.814	0.821	0.761	0.773

Notes: The sample includes only firms with non-zero production and non-production workers, firms that continuously observed from year to year, and firms observed more than once during the sample period (1993–2006). Columns (2) (4) and (6) have fewer observations than other columns because the additional regressors have missing values in 2001, 2002, 2003, and 2005. Robust standard errors clustered by firm are reported in parentheses. ***p < 0.01, **p < 0.05, *p < 0.1