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Minimum wage hikes and the wage growth of low-wage workers

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  • Joanna K Swaffield

Abstract

This paper presents difference-in-differences estimates of the impact of the British minimum wage on the wage growth of low-wage employees. Estimates of the probability of low-wage employees receiving positive wage growth have been significantly increased by the minimum wage upratings or hikes. However, whether the actual wage growth of these workers has been significantly raised or not depends crucially on the magnitude of the minimum wage hike considered. Findings are consistent with employers complying with the legally binding minimum wage but holding down or offsetting the wage growth that they might have awarded in periods of relatively low minimum wage hikes.

Suggested Citation

  • Joanna K Swaffield, 2012. "Minimum wage hikes and the wage growth of low-wage workers," Discussion Papers 12/10, Department of Economics, University of York.
  • Handle: RePEc:yor:yorken:12/10
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    More about this item

    Keywords

    Minimum wages; wage growth; difference-in-differences estimator; measurement error;

    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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