(DP 2010-05) Firm Characteristics as Determinants of Views on the Minimum Wage Policy

Gerardo P. Sicat

Abstract


In this study, the opinions of operating enterprises regarding the minimum wage policy are studied with the use of ordered logit regression model. The study uses survey data that asked a series of questions dealing with labor market policies in the Philippines. The aim of this regression model is to estimate the probability that the respondent would choose one of the following ordered levels of answers to the question involving their opinion of the country’s process of setting the minimum wage level: very poor, poor, fair, good, and excellent. The results of the regressions show that categorical groupings of the respondent
firms determine the direction in which respondent firms choose their judgment of the labor policy issue. In particular, the nature of ownership, market orientation of the firm, age of the enterprise, employment size, among others, and even the specific position of the official of the company assigned to answer the survey play important influences on the formation of the firm’s opinion on the policy. Such findings are likely to be important in framing reform issues on labor policies.

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