Wage Convergence among ASEAN countries

Abstract: This thesis discusses whether wage convergence has taken place between six countries in the Association of the Southeast Asian Nation (ASEAN) from the time between 2000 and 2014. The countries included are Singapore, Indonesia, Malaysia, Philippines, Thailand and Vietnam. Following the approach by Stehrer and Wörz (2003), a fixed-effects model which uses initial wage gap to a reference country (this case Singapore) was used. Conclusions in this thesis lie mainly in line with previous literature. There seems to be convergence among all countries in the dataset, even when controlling for country-fixed effects and allowing for country specific slopes. However, the magnitudes do differ from previous literature, which could be due to misspecification or measurement errors.