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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5278.
Length: 43 pages
Date of creation: Oct 2010
Date of revision:
Publication status: published in: Oxford Bulletin of Economics and Statistics, 2012, 74 (1), 78 - 106
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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.
- Peter Dolton & Chiara Rosazza-Bondibene & Jonathan Wadsworth, 2010. "Employment, Inequality and the UK National Minimum Wage over the Medium-Term," CEP Discussion Papers dp1007, Centre for Economic Performance, LSE.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-11-13 (All new papers)
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- Richard Blundell & Claire Crawford & Wenchao (Michelle) Jin, 2013. "What can wages and employment tell us about the UK's productivity puzzle?," IFS Working Papers W13/11, Institute for Fiscal Studies.
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