Abstract
This paper investigates the role of minimum wages in determining school enrolment (educational investment) in Indonesia using the National Socioeconomic Survey (Susenas). It finds that minimum wage legislation has a negative and significant substitution effect on educational investment. Individuals are more likely to drop out of senior secondary school as a result of a minimum wage legislation. Even though the response among low-income households is positive, this result may be generated by a fall in the probability of obtaining low-skilled employment, which offset the substitution effect.
| Original language | English |
|---|---|
| Pages (from-to) | 181-204 |
| Journal | Bulletin of Monetary Economics and Banking (Buletin Ekonomi Moneter dan Perbankan) |
| Volume | 24 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 2021 |