Wage inequality, minimum wage effects, and spillovers
AbstractThis paper investigates possible spillover effects of the UK minimum wage. The halt in the growth in inequality in the lower half of the wage distribution (as measured by the 50:10 percentile ratio) since the mid-1990s, in contrast to the continued inequality growth in the upper half of the distribution, suggests the possibility of a minimum wage effect and spillover effects on wages above the minimum. This paper analyses individual wage changes, using both a difference-in-differences estimator and a specification involving comparisons across minimum wage upratings, and concludes that there have not been minimum wage spillovers. Since the UK minimum wage has always been below the 10-super-th percentile, this lack of spillovers implies that minimum wage changes have not had an effect on the 50:10 percentile ratio measure of inequality in the lower half of the wage distribution. Copyright 2012 Oxford University Press 2012 All rights reserved, Oxford University Press.
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Bibliographic InfoArticle provided by Oxford University Press in its journal Oxford Economic Papers.
Volume (Year): 64 (2012)
Issue (Month): 4 (October)
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Postal: Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK
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Web page: http://oep.oupjournals.org/
Other versions of this item:
- Stewart, Mark B., 2011. "Wage Inequality, Minimum Wage Effects and Spillovers," The Warwick Economics Research Paper Series (TWERPS) 965, University of Warwick, Department of Economics.
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
- J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
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