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A Persistence Model of the National Minimum Wage

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  • Jones, Melanie K.

    ()
    (Swansea University)

  • Jones, Richard J.

    ()
    (Swansea University)

  • Murphy, Philip D.

    ()
    (Swansea University)

  • Sloane, Peter J.

    ()
    (Swansea University)

Abstract

This paper utilises the panel element of the BHPS (waves 9 to 14) to examine the dynamics of the National Minimum Wage (NMW) introduced to Britain in 1999. Specifically a persistence measure based on a random effects probit model for those affected by the NMW is constructed. The conditional probabilities imply some degree of state dependence, but there is also a considerable amount of turnover from one year to the next among those affected by the NMW.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2595.

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Length: 32 pages
Date of creation: Feb 2007
Date of revision:
Handle: RePEc:iza:izadps:dp2595

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Keywords: National Minimum Wage; state dependence; wage mobility;

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  1. Cappellari, Lorenzo & Jenkins, Stephen P., 2004. "Modelling low pay transition probabilities, accounting for panel attrition, non-response, and initial conditions," ISER Working Paper Series 2004-08, Institute for Social and Economic Research.
  2. Mundlak, Yair, 1978. "On the Pooling of Time Series and Cross Section Data," Econometrica, Econometric Society, Econometric Society, vol. 46(1), pages 69-85, January.
  3. Sara Lemos, 2004. "Are Wage and Employment Effects Robust to Alternative Minimum Wage Variables?," Discussion Papers in Economics 04/4, Department of Economics, University of Leicester.
  4. Jeffrey M Wooldridge, 2002. "Simple solutions to the initial conditions problem in dynamic, nonlinear panel data models with unobserved heterogeneity," CeMMAP working papers, Centre for Microdata Methods and Practice, Institute for Fiscal Studies CWP18/02, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
  5. Robinson, Helen, 2002. " Wrong Side of the Track? The Impact of the Minimum Wage on Gender Pay Gaps in Britain," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(5), pages 417-48, December.
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