Abstract
There is possibility of bias in previous study about impact of minimum wages on labor absorption in formal and informal sectors because it has not yet accommodated the spatial effects of inter-regional labor market dependencies. This study aims to examine impact increasing of minimum wage on labor absorption in formal and informal sector without spatial effects then compared with if there are spatial effects. Without spatial effect, the model used is panel model and with spatial effect, model used is Panel Spatial Auto-Regressive model. The dependent variable used is labor absorption in formal sector relative to informal sector, whereas the independent variable is the real minimum wage in the form of the natural logarithm. The result of both models showed that increasing of minimum wage significantly reduced the labor absorption of formal sector relative to informal sector. Coefficient value of the impact increasing of minimum wage produced by the spatial model is greater than the non-spatial model whereas from the model criteria results show better spatial model, so it can be concluded there is underestimate in the previous study which does not take into account the spatial dependencies of the labor market .
Highlights
Penelitian dampak upah minimum pada penyerapan tenaga kerja sektor formal dan informal menarik untuk diteliti kembali karena ada desentralisasi penetapan upah minimum dari pemerintah pusat ke pemerintah provinsi
Keterangan: Signifikan pada ***α=1%, **α=5%, *α=10% Wc= Model Spasial menggunakan matriks spasial contiguity W50=Model Spasial menggunakan matriks spasial jarak dengan cut off 50 mil W100=Model spasial menggunakan matriks spasial jarak dengan cut off 100 mil W200=Model spasial menggunakan matriks spasial jarak dengan cut off 200 mil Wi=Model spasial menggunakan matriks spasial invers jarak
Minimum wage policy and its impact on employment in the urban formal sector
Summary
Karena terdapat variasi data antar kabupaten dalam provinsi maka Mello & Comola (2010) menggunakan data panel level kabupaten dan menemukan dampak penurunan penyerapan tenaga kerja sektor formal dalam menanggapi kenaikan upah minimum. Riyadi (2014) dengan menggunakan unit analisis makro level provinsi juga menemukan penurunan penyerapan tenaga kerja sektor informal dalam menanggapi kenaikan upah minimum. Penelitian tentang dampak upah minimum terhadap penyerapan tenaga kerja pada incomplete coverage dengan memperhatikan dependensi spasial pasar tenaga kerja sepengetahuan penulis baru satu yaitu Magruder (2013). Berdasarkan hal tersebut maka penelitian ini bertujuan melihat dampak upah minimum terhadap penyerapan tenaga kerja sektor formal dan sektor informal dengan menggunakan efek spasial dan definisi tenaga kerja formalinformal berdasarkan status pekerjaan dan jenis jabatan dengan periode setelah desentralisasi serta cakupannya seluruh kabupaten di Indonesia. Dari penjelasan tersebut dapat disimpulkan adanya upah minimum akan menurunkan penyerapan tenaga kerja sektor formal dan menaikkan penyerapan tenaga kerja sektor informal
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
