Is a single minimum wage policy viable option? Evidence from the impact of minimum wage on youth employment in Malaysia

Hazrul Shahiri, Zulkifly Osman and Mukhriz Izraf Azman Aziz

Asian-Pacific Economic Literature, 2025, vol. 39, issue 1, 86-101

Abstract: The present study is aimed to identify an ideal mechanism to reduce negative effect of minimum wage on youth employment generation. Using available data from Department of Statistics, the study runs an annual panel regression at the state level based on fixed effect specification model. The finding demonstrates that the minimum wage has a negative effect on employment, particularly among youth. It implies that there is an excess of labour supply in the market at the current wage rate. As a result, the rate set is higher than equilibrium, signifying firm disadvantages. The negative effect is more prevalent if the single national minimum wage rate policy is applied to all states. Therefore, the national wage policy should be thoroughly examined. Instead, a regional wage rate should be explored as a potential solution for mitigating and preventing negative employment effects.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/apel.12427

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:apacel:v:39:y:2025:i:1:p:86-101

Ordering information: This journal article can be ordered from
https://ordering.onl ... 7-8411&ref=1467-8411

Access Statistics for this article

Asian-Pacific Economic Literature is currently edited by Yixiao Zhou

More articles in Asian-Pacific Economic Literature from The Crawford School, The Australian National University
Bibliographic data for series maintained by Wiley Content Delivery ().