Browsing by Author "Tamase, Paolo Emmanuel S."
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Item Restricted When do mnimum wages determine income inequality? the effect of regional heterogeneity and the Philippine case (1991-2009)(2012-03) Reinoso, Regina Teresa B.; Tamase, Paolo Emmanuel S.; Desierto, Desiree A.This paper aims to explore the relationship between minimum wages and regional income inequality in the Philippine case. In particular, the objective of the paper is to assess whether minimum wages exacerbated regional income inequality in the Philippines, and if so, under which circumstances. The main experiment consisted of two data sets-pre-2005 and post-2005-that included the gini coefficient as dependent variable; the non-agriculture, agriculture (plantation), and agriculture (non- plantation) minimum wages as main independent variables of interest; and controls. Using panel data regression techniques, it is discovered that, individually, minimum wages were insignificant on both pre-2005 and post-2005 models; however, for the pre-2005 model, the three wages did have a jointly significant effect on the dependent variable. The peculiarity is attributed to intra-regional heterogeneity, which is also used to explain the difference between the Philippine experience and those of Latin American countries, as well as the disparity between the pre-2005 and post-2005 results. In its conclusion, the paper challenges conventional wisdom offered by classical theory: first, minimum wages have a significant effect on income distribution if a single or a few wages are imposed on a heterogeneous labor market; and second, if minimum wages are imposed on more homogenous sectors of the labor market, they lose any significant impact on income inequality.