The impact of the national minimum wage on the pay distribution, employment and training

David Metcalf

Economic Journal, 2004, vol. 114, issue 494, C84-C86

Abstract: Britain's first ever national minimum wage (NMW) came into force in April 1999 covering some 5% of workers. Between 1999 and 2002 the NMW rose in line with the growth in average earnings. But for 2003-6 the NMW will be ratcheted up relative to median pay. The evidence shows that between 1998 and 2002 the bottom decile of the pay distribution experienced above average pay rises with no spillover effects further up the distribution. There was no overall employment effect but a small negative impact in the care home sector. The NMW boosts the probability and intensity of training. Copyright 2004 Royal Economic Society.

Date: 2004
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