The literature on the effects of minimum wage on labour market variables in developing
countries is rather scarce. The current study endeavours to assess the impact of minimum
wages hikes on the labour market in Thailand between 1990 and 2004 based on labour
force survey data. This paper puts together statistical evidence for the formal and informal
employment effects of minimum wages. While we find no adverse minimum wage impact
on overall employment, the picture is somewhat different if we focus on covered sectors as
we find negative minimum wage effects in manufacturing. We also find that higher
minimum wages may lead to greater unemployment and may increase the size of the
informal sector. However, negative minimum wage impacts on employment are rather
small. Thus, a reasonable increase in the minimum wages in Thailand is unlikely to produce
large employment effects. Moreover, it is difficult to blame the minimum wages for any
employment downturn experienced by the Thai economy in recent years.