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Wage Rise for Unskilled Workers in Cambodia
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Journal Article
Wage Rise for Unskilled Workers in Cambodia
2024
Overview
The real wages of agricultural workers and unskilled workers in non-agricultural sectors in Cambodia remained at low levels during the 2000s, but experienced a rapid increase in the 2010s when labour migration from Cambodia to Thailand increased. Analysing wage data from 2000 to 2018 using the Vector Error Correction Model (VECM), this study found that, in the 2010s, the rise in Thailand’s minimum wage led to large wage increases among agricultural workers in Cambodia, further leading to an increase in wages for unskilled garment factory and construction workers. These findings suggest that Thailand’s wage increase led to an increase in labour migration from rural areas in Cambodia to Thailand, resulting in a decrease in labour supply in rural areas and a reduction in migration from rural areas to non-agricultural sectors in urban areas. These findings also suggest that labour migration to Thailand negatively affects the development of the garment industry by raising labour costs.
Publisher
ISEAS - Yusof Ishak Institute,ISEAS–Yusof Ishak Institute,Institute of Southeast Asian Studies (ISEAS)
Subject
