Determinants of school enrolment in Indonesia: The role of minimum wage

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    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 languageEnglish
    Pages (from-to)181-204
    JournalBulletin of Monetary Economics and Banking (Buletin Ekonomi Moneter dan Perbankan)
    Issue number2
    Publication statusPublished - 2021


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