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The UK Minimum Wage at Age 22: A Regression Discontinuity Approach

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  • David Wilkinson

    ()

  • Rebecca Riley

    ()

Abstract

A regression discontinuity approach is used to analyse the effect of the legislated increase in the UK National Minimum Wage (NMW) that occurs at age 22 on various labour market outcomes. Using data from the Labour Force Survey we find a 2-4% point increase in the employment rate of low skilled individuals. Unemployment declines among men and inactivity among women. We find no such effect before the NMW was introduced and no robust impacts at age 21 or 23 years. Our results are robust to a range of specification tests.

Suggested Citation

  • David Wilkinson & Rebecca Riley, 2011. "The UK Minimum Wage at Age 22: A Regression Discontinuity Approach," National Institute of Economic and Social Research (NIESR) Discussion Papers 378, National Institute of Economic and Social Research.
  • Handle: RePEc:nsr:niesrd:2946
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    References listed on IDEAS

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    1. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
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    12. Stewart, Mark B, 2002. " Estimating the Impact of the Minimum Wage Using Geographical Wage Variation," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 64(0), pages 583-605, Supplemen.
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    Cited by:

    1. repec:zbw:ifweej:20185 is not listed on IDEAS
    2. repec:spr:izalpo:v:7:y:2018:i:1:d:10.1186_s40173-018-0098-4 is not listed on IDEAS
    3. Bargain, Olivier & Doorley, Karina & Van Kerm, Philippe, 2018. "Minimum Wages and the Gender Gap in Pay: New Evidence from the UK and Ireland," IZA Discussion Papers 11502, Institute for the Study of Labor (IZA).
    4. Fidrmuc, Jan & Tena, J. D., 2018. "UK national minimum wage and labor market outcomes of young workers," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 12, pages 1-28.
    5. 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).
    6. Piza, Caio & Souza, André Portela Fernandes de, 2016. "Short and long-term effects of a child-labor ban," Textos para discussão 428, FGV/EESP - Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
    7. Tim Butcher & Richard Dickens & Alan Manning, 2012. "Minimum Wages and Wage Inequality: Some Theory and an Application to the UK," CEP Discussion Papers dp1177, Centre for Economic Performance, LSE.
    8. repec:spr:stpapr:v:58:y:2017:i:4:d:10.1007_s00362-016-0745-z is not listed on IDEAS
    9. Mazzutti, Caio Cícero Toledo Piza da Costa, 2016. "Three essays on the causal impacts of child labour laws in Brazil," Economics PhD Theses 0616, Department of Economics, University of Sussex.
    10. Anna Baranowska-Rataj & Iga Magda, 2015. "The impact of the minimum wage on job separations and working hours among young people in Poland," Working Papers 75, Institute of Statistics and Demography, Warsaw School of Economics.
    11. BARGAIN Olivier & DOORLEY Karina & VAN KERM Philippe, 2016. "Minimum wages and the gender gap in pay. Evidence from the UK and Ireland," LISER Working Paper Series 2016-02, LISER.
    12. Sachverständigenrat zur Begutachtung der Gesamtwirtschaftlichen Entwicklung (ed.), 2015. "Zukunftsfähigkeit in den Mittelpunkt. Jahresgutachten 2015/16," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201516, April.
    13. repec:esr:resser:bkmnext327 is not listed on IDEAS

    More about this item

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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