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National minimum wage and employment of young workers in the UK

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  • J. D. Tena
  • Jan Fidrmuc

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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 & Jan Fidrmuc, 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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    References listed on IDEAS

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    1. Richard Dickens & Rebecca Riley & David Wilkinson, 2015. "A Re-examination of the Impact of the UK National Minimum Wage on Employment," Economica, London School of Economics and Political Science, vol. 82(328), pages 841-864, October.
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    Cited by:

    1. Maria Marimpi & Pierre Koning, 2018. "Youth minimum wages and youth employment," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-18, December.
    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 of Labor Economics (IZA).
    3. Ganong, Peter & Jäger, Simon, 2014. "A Permutation Test and Estimation Alternatives for the Regression Kink Design," IZA Discussion Papers 8282, Institute of Labor Economics (IZA).
    4. repec:hrv:faseco:34222894 is not listed on IDEAS
    5. Kelly, Elish & McGuinness, Seamus, 2017. "A study of sub-minimum wage rates for young people," Research Series, Economic and Social Research Institute (ESRI), number BKMNEXT327, March.

    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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