The Employment Effects of the October 2003 Increase in the National Minimum Wage
AbstractThere is a growing body of research that measures employment effects of the minimum wage by using longitudinal data on individuals to compare job loss of workers affected by a minimum wage increase with those who are not directly affected. This sort of study requires good quality wage data in order to clearly identify these treatment and control groups. Much of the evidence on the impact of the UK minimum wage uses this technique with poor quality wage data. This paper examines the impact of the October 2003 increase in the National Minimum Wage (NMW) using a much better measure of the wage. We find insignificant negative effects on the employment retention rates of all adults and, most notably, male workers. Analysis of the probability of employment retention across different hourly wage rates also show how sensitive this methodology can be to different definitions of the treatment and control group.
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Bibliographic InfoPaper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0693.
Date of creation: Jun 2005
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Minimum Wages; Employment Transitions; Wages;
Other versions of this item:
- Richard Dickens & Mirko Draca, 2005. "The Employment Effects of the October 2003 Increase in the National Minimum Wage," Working Papers 532, Queen Mary, University of London, School of Economics and Finance.
- J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
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