Has the national minimum wage reduced UK wage inequality?
AbstractThe paper investigates the effect on the wage distribution of the introduction, in April 1999, of the national minimum wage (NMW) in the UK. Because of the structure of UK earnings statistics, it is not straightforward to investigate this and various methods for adjusting the published statistics are discussed. The main conclusions are that the NMW does have a detectable effect on the wage distribution and that compliance with the NMW is widespread but the effect is limited because the NMW has been set at a level such that only 6-7% of workers are directly affected and the NMW has had virtually no effect on the pay of workers who are not directly affected. Furthermore, virtually all the changes occurred within 2 months of the introduction in April 1999 and its effect declined over time from April 1999 to September 2001 as the minimum wage was not uprated in line with the increase in average earnings. The more substantial increase in the NMW in October 2001 partially, but not wholly, restored some of this decline in impact. Copyright 2004 Royal Statistical Society.
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Bibliographic InfoArticle provided by Royal Statistical Society in its journal Journal of the Royal Statistical Society Series A.
Volume (Year): 167 (2004)
Issue (Month): 4 ()
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Web page: http://www.blackwellpublishing.com/journal.asp?ref=0964-1998
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Other versions of this item:
- Richard Dickens & Alan Manning, 2002. "Has The National Minimum Wage Reduced UK Wage Inequality?," CEP Discussion Papers dp0533, Centre for Economic Performance, LSE.
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sue Fernie & Helen Gray, 2002. "Its a Family Affair: the Effect of Union Recognition and Human Resource Management on the Provision of Equal Opportunities in the UK," CEP Discussion Papers dp0525, Centre for Economic Performance, LSE.
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