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Minimum wage hikes and the wage growth of low-wage workers
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| Journal | Bulletin of Economic Research |
|---|---|
| Date | E-pub ahead of print - 15 Nov 2013 |
| Date | Published (current) - Oct 2014 |
| Issue number | 4 |
| Volume | 66 |
| Pages (from-to) | 384–405 |
| Early online date | 15/11/13 |
| Original language | English |
Abstract
This paper presents difference-in-differences estimates of the impact of the British minimum wage on the wage growth of low-wage employees. Estimates of the probability of low-wage employees receiving positive wage growth have been significantly increased by the minimum wage upratings or hikes. However, whether the actual wage growth of these workers has been significantly raised or not depends crucially on the magnitude of the minimum wage hike considered. Findings are consistent with employers complying with the legally binding minimum wage but holding down or offsetting the wage growth that they might have awarded in periods of relatively low minimum wage hikes.
- difference-in-differences estimator, measurement error, minimum wages, wage growth
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