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National minimum wage and labour market outcomes of young workers

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  • Fidrmuc, Jan
  • Tena Horrillo, Juan de Dios

Abstract

We analyze the impact of the national minimum wage (NMW) in the UK on the employment of young workers. We utilize the regression discontinuity approach to assess the impact of age-related increases in the NMW when workers turn 18 and 22. The previous literature has found little evidence of an adverse impact of the NMW on the UK labour market, both when considering the age-related increases or the regular annual increases that apply to all NMW rates. We fail to find any effect of turning 22 on employment. However, we find a significant and negative effect of male workers turning 21. We also find a negative effect for both genders upon turning 18. The age-related NMW rates 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

  • Fidrmuc, Jan & Tena Horrillo, Juan de Dios, 2012. "National minimum wage and labour market outcomes of young workers," DES - Working Papers. Statistics and Econometrics. WS ws121209, Universidad Carlos III de Madrid. Departamento de Estadística.
    • Handle: RePEc:cte:wsrepe:ws121209
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    1. Claus Thustrup Kreiner & Daniel Reck & Peer Ebbesen Skov, 2020. "Do Lower Minimum Wages for Young Workers Raise Their Employment? Evidence from a Danish Discontinuity," The Review of Economics and Statistics, MIT Press, vol. 102(2), pages 339-354, May.
    2. Knabe Andreas & Schöb Ronnie & Thum Marcel, 2014. "Der flächendeckende Mindestlohn," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 15(2), pages 133-157, June.
    3. Piotr Lewandowski & Agnieszka Kaminska, 2015. "The effects of minimum wage on a labour market with high temporary employment," IBS Working Papers 7/2015, Instytut Badan Strukturalnych.
    4. Majchrowska, Aleksandra & Zółkiewski, Zbigniew, 2012. "The impact of minimum wage on employment in Poland," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 24, pages 211-239.

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