Care homes: effects of the National Living Wage

Giulia Giupponi and Stephen Machin

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Abstract: The National Living Wage, which was introduced in 2016, has substantially raised wages at the bottom of the hourly wage distribution in care homes in England, a sector that employs a large number of low-paid workers. According to research by Giulia Giupponi and Stephen Machin, wages have increased with few adverse effects on employment and hours worked. But their study also finds that the margin of adjustment that care home providers have used to offset higher wage costs appears to be the quality of care services. Firms' responses to higher wage costs raise concerns about the ability of the care home industry to meet fundamental standards of quality and safety.

Keywords: minimum wage structure; employment; wage spillovers (search for similar items in EconPapers)
JEL-codes: J23 J31 (search for similar items in EconPapers)
Date: 2018-07
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Persistent link: https://EconPapers.repec.org/RePEc:cep:cepcnp:529

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