Minimum Wages and Poverty in a Developing Country: Simulations from Indonesia’s Household Survey

Bird, Kelly; Manning, Chris

doi:10.1016/j.worlddev.2007.05.012

Cited by 73 publications

(38 citation statements)

References 14 publications

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“…Based on the regression equations, at the point where maximum diversity is conserved, an annual gross income per 0.1 ha of approximately IDR 3.3 million (US$ 287; US$1 = IDR 11,500 in February 2009) can be generated, or approximately IDR 2.3 million (US$200) if bamboo-dominated gardens are excluded. That amount, however, is not a sufficient minimum income in Indonesia (the per capita income of US$2 a day as the adjusted poverty line: Bird and Manning 2008). The gardens are useful for subsistence purposes to obtain various products, such as fruits, timber, and fuelwood, but not as a primary source of monetary income.…”

Section: Optimizing Profitability and Agrobiodiversitymentioning

confidence: 99%

Traditional perennial crop-based agroforestry in West Java: the tradeoff between on-farm biodiversity and income

et al. 2010

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Agroforestry systems have been re-evaluated with a renewed scientific interest as appropriate models for achieving sustainable production while maintaining planned and associated biodiversity and agroecosystem functioning. Traditional bamboo-tree gardens in West Java are known to play substantial ecological and socioeconomic roles. In this study, we attempted to elucidate the relationship between income generation and biodiversity by studying 83 bambootree gardens that varied in species composition and degree of commercialization. We conducted a survey of the vegetation and interviewed the owners or managers of each plot. We identified 42 planned and utilized species and 19 associated non-use species. Eight vegetation groups were identified by two-way indicator species analysis (TWINSPAN), each of which varied in individual densities of different utilization species types, Simpson's diversity index, management intensities, and potential annual gross income. The group with the highest potential income generation was dominated by clove trees (Syzygium aromaticum); however, this group also had a lower level of diversity and higher levels of management intensity than the other groups, but all of the pairwise groups were not significantly different. About 60% of the villagers used at least some fuelwood as a domestic energy source, and almost all of them collected fuelwood from bamboo-tree gardens regardless of ownership. There were no significant differences in density of potential fuelwood species among the vegetation groups. There were significant positive correlations between income and most management activities. The regression model between gross income and Simpson's diversity index with the best fit was a unimodal curve, which strongly suggests that maximum diversity can be conserved at an intermediate level of income. Nevertheless, this intermediate level of gross income is probably not adequate as the primary source of income for garden owners, although some gardens had the potential to achieve higher income levels with no decline in diversity. We suggest that maximizing individual density and multistratifying canopy layers could improve profitability within perennial crop-based agroforestry systems in West Java.

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Section: Optimizing Profitability and Agrobiodiversitymentioning

confidence: 99%

Traditional perennial crop-based agroforestry in West Java: the tradeoff between on-farm biodiversity and income

et al. 2010

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“…Particularly, Rama (2001) and Suryahadi et al (2001) show that minimum wage hikes have a positive impact on average wages of all workers and all segments of the workforce but are mostly insignificant except for the sub-sample of blue-collar workers. On the contrary, using the simulation framework, Bird and Manning (2008) report negative effects of the policy on wages in the informal sector.…”

Section: Introductionmentioning

confidence: 96%

Does the minimum wage reduce wage inequality? Evidence from Thailand

Leckcivilize

2015

IZA J Labor Develop

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Most of the minimum wage literature in developing countries provides supporting evidence of its effectiveness in reducing wage inequality. Using minimum wage data from Thailand (1985Thailand ( -2010, I find rather mixed outcomes. The minimum wage seems to help compress the lower part of wage distribution for employees in large businesses. However, the effect does not extend to small and medium firms in the covered sector. In contrast with its role as a benchmark for wage adjustment in Latin America, the minimum wage in Thailand does not reduce overall wage inequality owing to the high non-compliance rate and weak law enforcement, particularly in the informal sector. JEL classification: J38; O17

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“…A recent World Bank (2010) study corroborated this result for women but found the opposite for skill. Bird and Manning (2008) concluded that while most households with a lowwage, formal-sector worker benefit from higher minimum wages, the majority of the working poor are engaged in the informal sector and therefore face higher prices but receive no wage compensation. Furthermore, Chun and Khor (2010) found no evidence that wages in the informal sector increase in response to a rise in minimum wages in the formal sector.…”

Section: Who Bears the Cost Of Minimum-wage Increases?mentioning

confidence: 99%