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The Impact Of The Introduction Of The Uk Minimum Wage On The Employment Probabilities Of Low Wage Workers

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Author Info
Stewart, Mark B. (University of Warwick)

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Abstract

This paper uses longitudinal data from three contrasting datasets (matched Labour Force Surveys, the British Household Panel Survey and matched New Earnings Surveys) to estimate the impact of the introduction of the UK minimum wage (in April 1999) on the probability of subsequent employment among those whose wages would have needed to be raised to comply with the minimum. A difference-indifferences estimator is used, based on position in the wage distribution. No significant adverse employment effects are found for any of the four demographic groups considered (adult and youth, men and women) or in any of the three datasets used.

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File URL: http://www2.warwick.ac.uk/fac/soc/economics/research/workingpapers/publications/twerp630.pdf
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Publisher Info
Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 630.

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Length: 41 pages
Date of creation: 2002
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Handle: RePEc:wrk:warwec:630

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Related research
Keywords: Minimum wage; employment determination; labour demand; difference-in-differences estimator.;

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Find related papers by JEL classification:
J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. Brown, Charles & Gilroy, Curtis & Kohen, Andrew, 1982. "The Effect of the Minimum Wage on Employment and Unemployment," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 487-528, June. [Downloadable!] (restricted)
  2. Linneman, Peter, 1982. "The Economic Impacts of Minimum Wage Laws: A New Look at an Old Question," Journal of Political Economy, University of Chicago Press, vol. 90(3), pages 443-69, June. [Downloadable!] (restricted)
  3. Metcalf, David, 1999. "The Low Pay Commission and the National Minimum Wage," Economic Journal, Royal Economic Society, vol. 109(453), pages F46-66, February. [Downloadable!] (restricted)
  4. Richard Blundell & Alan Duncan & Costas Meghir, 1998. "Estimating Labor Supply Responses Using Tax Reforms," Econometrica, Econometric Society, vol. 66(4), pages 827-862, July.
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  5. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267. [Downloadable!] (restricted)
  6. Mark B. Stewart, 2002. "The Inter-related Dynamics of Unemployment and Low Pay," 10th International Conference on Panel Data, Berlin, July 5-6, 2002 B2-4, International Conferences on Panel Data. [Downloadable!]
  7. Stephen Machin & Alan Manning, 1994. "The effects of minimum wages on wage dispersion and employment: Evidence from the U.K. Wages Councils," Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University, vol. 47(2), pages 319-329, January.
  8. Janet Currie & Bruce Fallick, 1993. "The Minimum Wage and the Employment of Youth: Evidence from the NLSY," NBER Working Papers 4348, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Angrist, Joshua D. & Krueger, Alan B., 1999. "Empirical strategies in labor economics," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 23, pages 1277-1366 Elsevier. [Downloadable!] (restricted)
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  10. David Neumark & William Wascher, 2000. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Comment," American Economic Review, American Economic Association, vol. 90(5), pages 1362-1396, December. [Downloadable!] (restricted)
  11. Abowd, John M. & Kramarz, Francis & Margolis, David N. & Philippon, Thomas, 2000. "The Tail of Two Countries: Minimum Wages and Employment in France and the United States," IZA Discussion Papers 203, Institute for the Study of Labor (IZA). [Downloadable!]
  12. Brown, Charles, 1999. "Minimum wages, employment, and the distribution of income," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 32, pages 2101-2163 Elsevier. [Downloadable!] (restricted)
  13. Dickens, Richard & Machin, Stephen & Manning, Alan, 1999. "The Effects of Minimum Wages on Employment: Theory and Evidence from Britain," Journal of Labor Economics, University of Chicago Press, vol. 17(1), pages 1-22, January. [Downloadable!] (restricted)
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  14. Burkhauser, Richard V & Couch, Kenneth A & Wittenburg, David C, 2000. "A Reassessment of the New Economics of the Minimum Wage Literature with Monthly Data from the Current Population Survey," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 653-80, October. [Downloadable!] (restricted)
  15. David Card & Alan B. Krueger, 2000. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Reply," American Economic Review, American Economic Association, vol. 90(5), pages 1397-1420, December. [Downloadable!] (restricted)
  16. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-93, September. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Alison Booth & Mark L. Bryan, 2006. "Training, Minimum Wages and the Earnings Distribution," CEPR Discussion Papers 537, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
  2. König, Marion & Möller, Joachim, 2007. "Mindestlohneffekte des Entsendegesetzes? : eine Mikrodatenanalyse für die deutsche Bauwirtschaft (Minimum wage effects of the worker posting law? : a micro data analysis for the German construction s," IAB Discussion Paper 200730, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
    Other versions:
  3. Stewart, Mark B. & Swaffield, Joanna K., 2006. "The other margin : do minimum wages cause working hours adjustments for low-wage workers?," The Warwick Economics Research Paper Series (TWERPS) 746, University of Warwick, Department of Economics. [Downloadable!]
    Other versions:
  4. Elena Stancanelli, 2004. "Evaluating the impact of the French tax credit programme: a difference in difference model," Documents de Travail de l'OFCE 2004-07, Observatoire Francais des Conjonctures Economiques (OFCE). [Downloadable!]
  5. Natalya Y. Shelkova, 2008. "Low-wage labor markets amd the power of suggestion," Working Papers 1112, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
    Other versions:
  6. Mirko Draca & Stephen Machin & John Van Reenen, 2006. "Minimum Wages and Firm Profitability," IZA Discussion Papers 1913, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  7. Ohinata, Asako, 2008. "Fertility Response to Financial Incentives-Evidence from the Working Families Tax Credit in the UK," The Warwick Economics Research Paper Series (TWERPS) 851, University of Warwick, Department of Economics. [Downloadable!]
  8. repec:ese:iserwp: is not listed on IDEAS
  9. Robinson, Helen & Wadsworth, Jonathan, 2006. "The Impact of the Minimum Wage on the Incidence of Second Job Holding in Britain," Cardiff Economics Working Papers E2006/14, Cardiff University, Cardiff Business School, Economics Section. [Downloadable!]
    Other versions:
  10. Portugal, Pedro & Cardoso, Ana Rute, 2002. "Disentangling the Minimum Wage Puzzle: An Analysis of Worker Accessions and Separations," IZA Discussion Papers 544, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  11. Seamus McGuinness & John Freebairn, 2007. "Who Are the Low Waged?," Melbourne Institute Working Paper Series wp2007n08, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
  12. Arulampalam, Wiji & Booth, Alison L. & Bryan, Mark L., 2002. "Work-Related Training and the New National Minimum Wage in Britain," IZA Discussion Papers 595, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  13. Richard Dickens & Mirko Draca, 2005. "The Employment Effects of the October 2003 Increase in the National Minimum Wage," CEP Discussion Papers dp0693, Centre for Economic Performance, LSE. [Downloadable!]
  14. Sara Lemos, 2007. "A Survey of the Effects of the Minimum Wage in Latin America," Discussion Papers in Economics 07/04, Department of Economics, University of Leicester. [Downloadable!]
  15. Stephen Nickell, 2003. "Poverty and Worklessness in Britain," CEP Discussion Papers dp0579, Centre for Economic Performance, LSE. [Downloadable!]
    Other versions:
  16. Elena Stancanelli, 2007. "Evaluating the impact of the French tax credit on the employment rate of women," Documents de Travail de l'OFCE 2007-33, Observatoire Francais des Conjonctures Economiques (OFCE). [Downloadable!]
    Other versions:
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