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

IZA Journal of Labor & Development

Table 7 Minimum wages and average wages of production workers

	Dependent variable: Log(Real average wage of production workers)
	All Firms	All Firms	Small Firms	Small Firms	Large Firms	Large Firms
Log (Minimum Wage)	0.1060***	0.1537***	0.1317***	0.1844***	0.0607	0.0825*
	(0.0190)	(0.0226)	(0.0217)	(0.0260)	(0.0391)	(0.0473)
Log (Firm Age)		0.1001***		0.0960***		0.1322***
		(0.0090)		(0.0104)		(0.0200)
Foreign Share		0.0008***		0.0013***		0.0002
		(0.0003)		(0.0004)		(0.0004)
Export Share		−0.0000		0.0000		0.0001
		(0.0001)		(0.0001)		(0.0001)
Govt. Share		0.0010***		0.0015***		0.0003
		(0.0002)		(0.0003)		(0.0004)
Firm Fixed Effects	Yes	Yes	Yes	Yes	Yes	Yes
Year Effects	Yes	Yes	Yes	Yes	Yes	Yes
Observations	233,442	159,959	170,667	115,569	62,775	44,390
Number of Firms	32,388	30,941	27,855	26,269	8585	8295
R-squared	0.6221	0.6558	0.6678	0.7044	0.5281	0.5926

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. Small firms are firms which always have 150 or fewer workers; large firms are firms which always have more than 150 workers. 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