Issues in the measurement of low pay: 2010

Suzanne Fry and Felix Ritchie ()
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Suzanne Fry: Office for National Statistics

Working Papers from Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol

Abstract: The UK uses two major surveys as sources of earnings information to estimate the numbers on low pay. The methods for producing these figures are well established, but there are differences between employer and employee responses. These differences are accepted as a consequence of the different survey methods and purposes. Ormerod and Ritchie (2007) reviewed these explanations, and argued that all the results reflect, to a greater or lesser degree, behavioural response by both employers and survey respondents. In particular, the absolute and relative level of the minimum wage affected decisions made by employers and by the way that information is gathered. They also noted that the timing of data collection can affect the measurement. This paper updates that work with information up to 2009. The additional three years of data support and expand upon the earlier conclusions of that paper. In addition, some minor changes were made to the surveys to address measurement issue. This work notes that these changes had less effect than expected, implying that some of the measurement issues are more deep-seated than expected. As before, this paper supports the current methods for generating low pay estimates but suggests that "the number of low paid" can be a misleading construct without an awareness of these background issues.

Date: 2012-01-10
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Citations: View citations in EconPapers (7)

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