Does High Minimum Wage Attract Immigrants?

Abstract

Immigration is associated with an effort to get a better living. Therefore, this research analyzes whether the high minimum wage attracts immigrants. This study utilizes secondary data from Indonesian Statistics that cover the condition of immigrants in Java, an island with the highest population density. In this research, the proportion of immigrants is the dependent variable. At the same time, the minimum wage is the independent variable and the percentage of formal jobs and prosperity as covariates. The secondary data is analyzed by regression based on Fully Modified Ordinary Least Squares (FMOLS). This regression analysis is complemented by primary data through questionnaires sent to some economic experts. The primary data is analyzed by Delphi Method. The regression result shows no association between the proportion of immigrants and minimum wage. A high minimum wage does not attract people to enter an area. At the same time, a percentage of formal jobs and prosperity attract people to immigrate. In addition, the Delphi analysis exhibits similar results. The expert’s opinion about the impact of minimum wage is not convergence. Not all experts agree that migrant considers the high minimum wage. However, all experts agree that formal jobs, infrastructure, prosperity, amenities, and living costs have an impact on immigrants.