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Minimum wages in a low-wage labour market: Care homes in the UK

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  • Stephen Machin
  • Joan Wilson

Abstract

This paper studies the economic effects of minimum wages in a sector that is very vulnerable to minimum wage legislation, the UK care homes sector. We study the effects of the introduction of the National Minimum Wage (NMW) in April 1999 on wages and employment before and after minimum wage introduction and before and after the subsequent increase of the minimum wage in October 2001. We also study home closures between 1999 and 2001. The results show sizeable wage effects and some evidence of employment reductions but we are unable to detect any effect on home closure. Copyright 2004 Royal Economic Society.

Suggested Citation

  • Stephen Machin & Joan Wilson, 2004. "Minimum wages in a low-wage labour market: Care homes in the UK," Economic Journal, Royal Economic Society, vol. 114(494), pages 102-109, March.
  • Handle: RePEc:ecj:econjl:v:114:y:2004:i:494:p:c102-c109
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