This paper evaluates the causal effects of a minimum wage hike in the Philippines between 2016 and 2019, using a difference-in-differences approach with staggered treatment timing. Leveraging regional variation in the timing and magnitude of wage adjustments, the study estimates the impacts of real minimum wage hikes on employment, working hours, and average daily basic pay across key worker groups, such as the young, women, short-term, low-skilled, and service-sector workers. The analysis uses the doubly robust estimator, which integrates inverse probability weighting and outcome regression, to produce consistent and efficient treatment effect estimates under staggered adoption, while satisfying the parallel-trends assumption.
Results reveal a wage-hours-employment trade-off. Minimum wage hikes raise average daily basic pay by 2-6% for most worker groups, but these gains are accompanied by reductions in weekly work hours and, for the most vulnerable subgroups, employment contractions. Short-term workers experience moderate hours reductions with limited wage gains, while low-skilled short-term workers face the most pronounced hours compression of 2.4 to 4.3 hours per week. Young low-skilled workers bear the largest adverse employment effects with a 7.0-11.3% decline alongside hours reductions of 1.1-1.6 hours per week, despite modest wage gains. Women overall benefit from significant wage spillovers with a 4.5-5.6% increase in average daily pay, but low-skilled women exhibit negative wage effects by -3.5% to -8.1%, an outcome possibly driven by negative compositional adjustments, as firms disproportionately shed the higher-paid low-skilled workers to manage costs, and by wage compression. The services sector, dominated by small and medium enterprises, shows employment contractions of 8.6-10.8% among low-skilled workers.