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The employment effects of the October 2003 increase in the national minimum wage

Dickens, Richard and Draca, Mirko (2005) The employment effects of the October 2003 increase in the national minimum wage. CEPDP, 693. Centre for Economic Performance, London School of Economics and Political Science, London, UK. ISBN 075301873X

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Abstract

There is a growing body of research that measures employment effects of the minimum wage by using longitudinal data on individuals to compare job loss of workers affected by a minimum wage increase with those who are not directly affected. This sort of study requires good quality wage data in order to clearly identify these treatment and control groups. Much of the evidence on the impact of the UK minimum wage uses this technique with poor quality wage data. This paper examines the impact of the October 2003 increase in the National Minimum Wage (NMW) using a much better measure of the wage. We find insignificant negative effects on the employment retention rates of all adults and, most notably, male workers. Analysis of the probability of employment retention across different hourly wage rates also show how sensitive this methodology can be to different definitions of the treatment and control group.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk
Additional Information: © 2005 the authors
Library of Congress subject classification: H Social Sciences > HD Industries. Land use. Labor
Journal of Economic Literature Classification System: J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials by Skill, Training, Occupation, etc.
J - Labor and Demographic Economics > J6 - Mobility, Unemployment, and Vacancies > J63 - Turnover; Vacancies; Layoffs
Sets: Collections > Economists Online
Research centres and groups > Centre for Economic Performance (CEP)
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Identification Number: 693
Date Deposited: 23 Jul 2008 15:58
URL: http://eprints.lse.ac.uk/19889/

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