Has The National Minimum Wage Reduced UK Wage Inequality?

Dickens, Richard and Manning, Alan (2002) Has The National Minimum Wage Reduced UK Wage Inequality? Discussion Paper. Centre for Economic Performance, London School of Economics and Political Science.

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Abstract

This paper investigates the impact on the wage distribution of the introduction, in April 1999, of the National Minimum Wage in the UK. Because of the structure of UK earnings statistics, it is not straightforward to investigate this and a number of different methods for adjusting the published statistics are discussed. The main conclusions are that the NMW does have a detectable effect on the wage distribution and that compliance with the NMW is widespread but the impact is limited because the NMW has been set at a level such that only 6-7% of workers are directly affected and the NMW has had virtually no impact on the pay of workers not directly affected. Furthermore, virtually all the changes occurred within two months of the introduction in April 1999 and its impact declined over time from April 1999 to May 2001 as the minimum wage was not up-rated in line with the increase in average earnings.

Item Type: Reports and working papers (Discussion Paper)
Schools and Departments: School of Business, Management and Economics > Economics
Depositing User: Richard Dickens
Date Deposited: 06 Feb 2012 18:41
Last Modified: 29 May 2013 08:32
URI: http://sro.sussex.ac.uk/id/eprint/17801
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