Effect of Minimum Wage on Changes in the Thai Labor Market

This paper estimates the effect of real minimum wage on wage, labor income, total compensation, overtime income, working hours and dis-employment using individual level panel data, created from the matched-outgoing rotation group (matched-ORG) of the Labor Force Survey of Thailand between 2002 to 2013. We found that a hike in real minimum wage was accompanied by an increase in real wage and real total compensation. During the gradual-decline period (2002–2011), the effect of real minimum wage on real labor income, real overtime income, working hours and dis-employment are not significant, negatively significant, negatively significant and positively significant, respectively. On the other hand, during the big-jump period (2012–2013), the effect of real minimum wage on real labor income, real overtime income, working hours and dis-employment are positive significant, not significant, positively significant and negatively significant, respectively.