Minimum Wage Policy : Lessons with a Focus on the ASEAN Region
As developing economies continue to mature and enter the next phase of reforms, labor market issues and key policy instruments such as the minimum wage increasingly come to the forefront. Increased globalization and wider competition compel countri...
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| Language: | English en_US |
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Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2013/07/18699539/minimum-wage-policy-lessons-focus-asean-region http://hdl.handle.net/10986/16687 |
| Summary: | As developing economies continue to
mature and enter the next phase of reforms, labor market
issues and key policy instruments such as the minimum wage
increasingly come to the forefront. Increased globalization
and wider competition compel countries to make labor markets
more flexible so as not to hurt competitiveness. At the same
time, policymakers face pressure to rethink labor market
regulations (and social safety nets) to avoid disadvantaging
workers, especially the most vulnerable who are more prone
to employment insecurity. Evidence of the impact of minimum
wage policies in the East Asian context and in Association
of South East Asian Nations (ASEAN) countries, more
specifically remains very limited. A thorough literature
search identified only a few rigorous studies of the impact
of minimum wages on important welfare outcomes in ASEAN
countries, and some of the evidence was narrowly focused on
one sector and period or from a time when the institutional
setup and management of the policy was different from today.
Given the relevance of the minimum wage policy in ASEAN
economies, which are experiencing rapid economic growth
accompanied by rising income inequality and persistent
poverty among unskilled workers, having this evidence seems
critical. The objective of this report is to contribute to
the ongoing (and renewed) debate on the use of minimum wage
policy as a tool for addressing various socioeconomic
issues. It assumes minimum wages will remain in place, and
the analysis seeks to address knowledge gaps on the
policy's effects on worker outcomes and firm
performance in order to provide guidance to policymakers in
ASEAN countries (and similar contexts) on how to best manage
the policy. This report consists of seven chapters and is
divided into three parts. Part one focuses on the minimum
wage policy, its historical evolution, and the current
institutional context across ASEAN countries. Part two
delves into the socio-economic impacts of the minimum wage
policy on workers, households, firms, the economy, and the
ASEAN region. Part three links the findings from each
country to the ASEAN regional context and brings all the
analysis together into a policy and operational discussion. |
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