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Care homes: effects of the National Living Wage

Author

Listed:
  • Giulia Giupponi
  • Stephen Machin

Abstract

The National Living Wage, which was introduced in 2016, has substantially raised wages at the bottom of the hourly wage distribution in care homes in England, a sector that employs a large number of low-paid workers. According to research by Giulia Giupponi and Stephen Machin, wages have increased with few adverse effects on employment and hours worked. But their study also finds that the margin of adjustment that care home providers have used to offset higher wage costs appears to be the quality of care services. Firms' responses to higher wage costs raise concerns about the ability of the care home industry to meet fundamental standards of quality and safety.

Suggested Citation

  • Giulia Giupponi & Stephen Machin, 2018. "Care homes: effects of the National Living Wage," CentrePiece - The magazine for economic performance 529, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepcnp:529
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    File URL: https://cep.lse.ac.uk/pubs/download/cp529.pdf
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    More about this item

    Keywords

    minimum wage structure; employment; wage spillovers;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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