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Minimum wages in a low-wage labour market: Care homes in the UK

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Author Info

  • Stephen Machin
  • Joan Wilson

Abstract

This paper studies the economic effects of minimum wages in a sector that is very vulnerable to minimum wage legislation, the UK care homes sector. We study the effects of the introduction of the National Minimum Wage (NMW) in April 1999 on wages and employment before and after minimum wage introduction and before and after the subsequent increase of the minimum wage in October 2001. We also study home closures between 1999 and 2001. The results show sizeable wage effects and some evidence of employment reductions but we are unable to detect any effect on home closure. Copyright 2004 Royal Economic Society.

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Bibliographic Info

Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 114 (2004)
Issue (Month): 494 (03)
Pages: C102-C109

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Handle: RePEc:ecj:econjl:v:114:y:2004:i:494:p:c102-c109

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Citations

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Cited by:
  1. David Metcalf, 2007. "Why has the British national minimum wage had little or no impact on employment?," LSE Research Online Documents on Economics 19742, London School of Economics and Political Science, LSE Library.
  2. Ruth Hancock & Juliette Malley & Raphael Wittenberg & Marcello Morciano & Linda Pickard & Derek King & Adelina Comas-Herrera, 2013. "The role of care home fees in the public costs and distributional effects of potential reforms to care home funding for older people in England," LSE Research Online Documents on Economics 43154, London School of Economics and Political Science, LSE Library.
  3. Daniel Aaronson & Eric French & James MacDonald, 2004. "The minimum wage and restaurant prices," Working Paper Series WP-04-21, Federal Reserve Bank of Chicago.
  4. Mike Brewer, 2007. "Welfare reform in the UK: 1997 - 2007," IFS Working Papers W07/20, Institute for Fiscal Studies.
  5. Mirko Draca & Stephen Machin & John Van Reenen, 2011. "Minimum Wages and Firm Profitability," American Economic Journal: Applied Economics, American Economic Association, vol. 3(1), pages 129-51, January.
  6. repec:iab:iabzaf:v:40:i:4:p:431-438 is not listed on IDEAS
  7. Paul Frijters & Robert Gregory, 2006. "From Golden Age to Golden Age: Australia's 'Great Leap Forward'?," The Economic Record, The Economic Society of Australia, vol. 82(257), pages 207-224, 06.
  8. Benassi, Chiara, 2011. "The implementation of minimum wage : challenges and creative solutions," ILO Working Papers 462988, International Labour Organization.
  9. König, Marion & Möller, Joachim, 2007. "Mindestlohneffekte des Entsendegesetzes? : eine Mikrodatenanalyse für die deutsche Bauwirtschaft (Minimum wage effects of the worker posting law? : a micro data analysis for the German construction s," IAB Discussion Paper 200730, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  10. Franz, Wolfgang, 2007. "Der trügerische Charme des Mindestlohns (The deceptive charm of the minimum wage)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 40(4), pages 431-438.
  11. repec:iab:iabzaf:v:41:i:2/3:p:327-346 is not listed on IDEAS
  12. Daniel B. Klein & Stewart Dompe, 2007. "Reasons for Supporting the Minimum Wage: Asking Signatories of the "Raise the Minimum Wage" Statement," Econ Journal Watch, Econ Journal Watch, vol. 4(1), pages 125-167, January.
  13. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," NBER Working Papers 12663, National Bureau of Economic Research, Inc.
  14. Andrew Leigh, 2005. "Optimal Design of Earned Income Tax Credits: Evidence from a British Natural Experiment," CEPR Discussion Papers 488, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  15. J. Shackleton, 2007. "Britain’s Labor Market Under the Blair Governments," Journal of Labor Research, Springer, vol. 28(3), pages 454-476, July.

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