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

IZA Journal of Labor & Development

Table 6 Employment effects of minimum wages on male and female workers in small firms

	Dependent variable:
	Log of Employment of Production Workers				Log of Employment of Non-Production Workers
	Male		Female		Male		Female
Log (Min. Wage)	−0.0258	−0.0208	−0.058**	−0.0430	−0.0365	−0.0290	−0.061***	−0.0692**
	(0.0174)	(0.0210)	(0.0245)	(0.0309)	(0.0236)	(0.0289)	(0.0227)	(0.0287)
Log (Firm Age)		0.1202***		0.0964***		0.1003***		0.0802***
		(0.0081)		(0.0122)		(0.0110)		(0.0108)
Foreign Share		0.0007**		0.0001		0.0019***		0.0013***
		(0.0003)		(0.0006)		(0.0005)		(0.0004)
Export Share		0.0003***		0.0007***		0.0004**		0.0005***
		(0.0001)		(0.0001)		(0.0001)		(0.0001)
Govt. Share		0.0001		−0.0005**		0.0009***		−0.0000
		(0.0002)		(0.0003)		(0.0003)		(0.0002)
Firm Fixed Effects	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Year Effects	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Observations	167,873	113,780	126,026	83,780	159,346	106,834	129,736	85,473
Number of Firms	27,500	25,894	23,351	21,616	27,122	25,282	23,897	21,890
R-squared	0.8450	0.8498	0.8522	0.8591	0.8086	0.8104	0.7678	0.7708

Notes: The sample includes only small firms with non-zero production and non-production workers, small firms that continuously observed from year to year, and small firms observed more than once during the sample period. Small firms are firms which always have 150 or fewer workers. Both paid and unpaid workers are included as data since 2001 do not permit separation of paid and unpaid workers by gender. 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