The Effect of College Graduate Minimum Wage on Labor Market and Educational Choices in Thailand

Open Access
Author:
Thaminkaew, Thanakorn
Area of Honors:
Economics
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
  • Russell Wade Cooper, Thesis Supervisor
  • Russell Paul Chuderewicz, Honors Advisor
Keywords:
  • Economics
  • Employment
  • Education
  • Time Series Analysis
  • Minimum Wage
Abstract:
During the 2011 Thai general election, Pheu Thai Party promised to impose a college graduate’s minimum wage. The party won the election and imposed in January 2013 a minimum wage for college graduates working in the government and state enterprise sectors. In this paper, we intend to study the effect of this policy on the labor market and educational choices of students. We use time series data from 2002 to 2015 of the average wage, the employment rate, and the estimated number of students entering the workforce by educational attainment. These data are collected from the Bank of Thailand, the National Statistical Office of Thailand, and the Labor Market Information Administration Division, respectively. Based on the cross-correlation results, we find that the policy decreases the employment rate of college graduates. Nonetheless, the result suggests that students in the general upper secondary education are more likely to go to college since the policy has been enacted.