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    The impact of legal minimum wages on employment, income and poverty incidence in the Philippines

    Paqueo, Vicente B.; Orbeta, Aniceto; Lanzona, Leonardo | December 2016
    Abstract
    It is commonly believed that mandating higher legal minimum wages (LMWs) is needed to help the poor earn a level of income that would allow them healthy and dignified lives. It is also seen as a tool to protect the weak against exploitation. This popular belief motivates and justifies the recurrent demands for hefty increases in LMW. But what is the empirical evidence behind this? This article seeks to address this question. It finds that in the Philippines, higher LMWs: (i) are likely to reduce the work hours of average workers; (ii) can be disadvantageous against the very groups that LMWs are intended to protect; (iii) decrease the employment probability of the young, inexperienced, less educated and women laborers; and (iv) tends to ironically reduce average income and raise household poverty rate. These results illustrate how rapid rises in LMWs can be counter-productive and can go against the spirit of equal protection principle of the Constitution. If the goal is to help the poor and protect the weak, then these findings warrant the need to think more deeply and prudently about the use of LMWs and to consider other tools for achieving decent wages.
    Citation
    Paqueo, Vicente B.; Orbeta, Aniceto; Lanzona, Leonardo. 2016. The impact of legal minimum wages on employment, income and poverty incidence in the Philippines. © Philippine Institute for Development Studies. http://hdl.handle.net/11540/9226.
    Keywords
    Alleviating Poverty
    Anti-Poverty
    Extreme Poverty
    Fight Against Poverty
    Global Poverty
    Health Aspects Of Poverty
    Indicators Of Poverty
    Participatory Poverty Assessment
    Poverty Eradication
    Poverty Analysis
    Poverty In Developing Countries
    Poverty Reduction Efforts
    Urban Poverty
    Results-Based Monitoring And Evaluation
    Project Evaluation & Review Technique
    Performance Evaluation
    Impact Evaluation Reports
    Evaluation Criteria
    Development Indicators
    Environmental Indicators
    Economic Indicators
    Educational Indicators
    Demographic Indicators
    Health Indicators
    Disadvantaged Groups
    Low Income Groups
    Socially Disadvantaged Children
    Aging
    Rural Conditions
    Rural Development
    Social Conditions
    Urban Development
    Urban Sociology
    Project finance
    Resources evaluation
    Needs assessment
    Cost benefit analysis
    Poor
    Economic forecasting
    Health expectancy
    Social groups
    Political participation
    Distribution of income
    Inequality of income
    Developing countries
    Rural community development
    Mass society
    Social change
    Social policy
    Social stability
    Population
    Sustainable development
    Peasantry
    Urban policy
    Urban renewal
    Results mapping
    Risk assessment
    Participatory monitoring and evaluation
    Cost effectiveness
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    Citable URI
    http://hdl.handle.net/11540/9226
    Metadata
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    pidsdps1654.pdf (1.072Mb)
    Author
    Paqueo, Vicente B.
    Orbeta, Aniceto
    Lanzona, Leonardo
    Theme
    Poverty
    Evaluation
     
    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise
    Copyright 2016-2021 Asian Development Bank Institute, except as explicitly marked otherwise