Employment, Inequality and the UK National Minimum Wage over the Medium-Term
AbstractThis paper assesses the impact of the National Minimum Wage (NMW) on employment and inequality in the UK over the decade since its introduction in 1999. Identification is facilitated by using variation in the bite of the NMW across local labour markets and the different sized year on year up ratings of the NMW. We use an 'incremental differences-in-differences' (IDiD) estimator which allows us to estimate the effects of the NMW in each year since its introduction. We find that an increased bite of the NMW is associated with falls in lower tail wage inequality. Moreover, while the average employment effect of the NMW over the entire period is broadly neutral, there are small but significant positive employment estimates from 2003 onward, when the average bite of the NMW was at its highest since its introduction.
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Bibliographic InfoPaper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1007.
Date of creation: Oct 2010
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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP
Minimum wage; employment; wages; inequality;
Other versions of this item:
- Peter Dolton & Chiara Rosazza Bondibene & Jonathan Wadsworth, 2012. "Employment, Inequality and the UK National Minimum Wage over the Medium‐Term," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 74(1), pages 78-106, 02.
- Dolton, Peter & Rosazza-Bondibene, Chiara & Wadsworth, Jonathan, 2010. "Employment, Inequality and the UK National Minimum Wage over the Medium-Term," IZA Discussion Papers 5278, Institute for the Study of Labor (IZA).
- J0 - Labor and Demographic Economics - - General
- J2 - Labor and Demographic Economics - - Demand and Supply of Labor
- J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
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- Richard Blundell & Claire Crawford & Wenchao Jin, 2014.
"What Can Wages and Employment Tell Us about the UK's Productivity Puzzle?,"
Economic Journal, Royal Economic Society,
Royal Economic Society, vol. 0(576), pages 377-407, 05.
- Richard Blundell & Claire Crawford & Wenchao (Michelle) Jin, 2013. "What can wages and employment tell us about the UK's productivity puzzle?," IFS Working Papers, Institute for Fiscal Studies W13/11, Institute for Fiscal Studies.
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