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National minimum wage and employment of young workers in the UK

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Abstract

We analyze the impact of the UK national minimum wage (NMW) on the employment of young workers. The previous literature found little evidence of an adverse impact of the NMW on the UK labor market. We focus on the age-related increases in the NMW at 18 and 22 years of age. Using regression discontinuity design, we fail to find any effect of turning 22. However, we find a significant and negative employment effect for male workers at 21, which we believe to be an anticipation effect. We also find a negative effect for both genders upon turning 18. The age-related NMW increases may have an adverse effect on employment of young workers, with this effect possibly occurring already well in advance of reaching the threshold age.

Suggested Citation

  • J. D. Tena, 2013. "National minimum wage and employment of young workers in the UK," Discussion Papers 12, Central European Labour Studies Institute (CELSI).
    • Handle: RePEc:cel:dpaper:12
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    Cited by:

    1. repec:spr:izalpo:v:7:y:2018:i:1:d:10.1186_s40173-018-0098-4 is not listed on IDEAS
    2. Kabátek, Jan, 2015. "Happy Birthday, You're Fired! The Effects of Age-Dependent Minimum Wage on Youth Employment Flows in the Netherlands," IZA Discussion Papers 9528, Institute for the Study of Labor (IZA).
    3. Ganong, Peter & Jäger, Simon, 2014. "A Permutation Test and Estimation Alternatives for the Regression Kink Design," IZA Discussion Papers 8282, Institute for the Study of Labor (IZA).
    4. repec:hrv:faseco:34222894 is not listed on IDEAS
    5. repec:esr:resser:bkmnext327 is not listed on IDEAS

    More about this item

    Keywords

    minimum wage; employment; young workers; regression discontinuity design;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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