DETERMINANTS OF SCHOOL ENROLMENT IN INDONESIA: THE ROLE OF MINIMUM WAGE
This paper investigates the role of minimum wages in determining school enrolment (educational investment) in Indonesia using the National Socioeconomic Survey (Susenas). It finds that minimum wage legislation has a negative and significant substitution eﬀect on educational investment. Individuals are more likely to drop out of senior secondary school as a result of a minimum wage legislation. Even though the response among low-income households is positive, this result may be generated by a fall in the probability of obtaining low-skilled employment, which oﬀset the substitution eﬀect.
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