DETERMINANTS OF SCHOOL ENROLMENT IN INDONESIA: THE ROLE OF MINIMUM WAGE

Dyah Savitri Pritadrajati ()
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Dyah Savitri Pritadrajati: Australian National University

Bulletin of Monetary Economics and Banking, 2021, vol. 24, issue 2, 181-204

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 efect 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 ofset the substitution efect.

Keywords: Minimum wage; Human capital investment; School enrolment (search for similar items in EconPapers)
JEL-codes: I25 I28 J24 J48 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:idn:journl:v:24:y:2021:i:2b:p:181-204

DOI: 10.21098/bemp.v24i2.1484

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