Beyond the wage

Changes in employment and compensation patterns in response to the national minimum wage

Research output: Book/ReportCommissioned report

2 Citations (Scopus)

Abstract

This study examines whether the national minimum wage has changed aspects of individuals’ work arrangements, other than just their hourly wage, drawing on data from the Annual Survey of Hours and Earnings and the Labour Force Survey. In contrast to earlier U.K. studies, the analysis includes worker fixed effects, thereby controlling for all time-invariant factors that influence employment outcomes. The results indicate that the minimum wage has a negative effect on a person’s likelihood of remaining in the same job, although its effect on the probability of exiting employment altogether is modest, since many workers change firms within a year of a minimum wage rise. Among those who remain with the same employer, the minimum wage reduces hours and weeks of work. It has little effect on levels of non-basic pay, the use of temporary contracts or flexible employment arrangements or the provision of pensions. Measurement error and the shortness of the panel in the Labour Force Survey limit the ability to derive accurate estimates using these data.
Original languageEnglish
PublisherLow Pay Commission
Commissioning bodyLow Pay Commission
Number of pages56
Publication statusPublished - 13 Mar 2014

Fingerprint

Wages
Minimum wage
National minimum wage
Workers
Labor force
Pensions
Measurement error
Fixed effects
Temporary contracts
Employers
Influence factors

Keywords

  • Minimum wage

Cite this

@book{61e1c498b8ab4c15b385060ad3719a59,
title = "Beyond the wage: Changes in employment and compensation patterns in response to the national minimum wage",
abstract = "This study examines whether the national minimum wage has changed aspects of individuals’ work arrangements, other than just their hourly wage, drawing on data from the Annual Survey of Hours and Earnings and the Labour Force Survey. In contrast to earlier U.K. studies, the analysis includes worker fixed effects, thereby controlling for all time-invariant factors that influence employment outcomes. The results indicate that the minimum wage has a negative effect on a person’s likelihood of remaining in the same job, although its effect on the probability of exiting employment altogether is modest, since many workers change firms within a year of a minimum wage rise. Among those who remain with the same employer, the minimum wage reduces hours and weeks of work. It has little effect on levels of non-basic pay, the use of temporary contracts or flexible employment arrangements or the provision of pensions. Measurement error and the shortness of the panel in the Labour Force Survey limit the ability to derive accurate estimates using these data.",
keywords = "Minimum wage",
author = "Papps, {Kerry L.} and Paul Gregg",
year = "2014",
month = "3",
day = "13",
language = "English",
publisher = "Low Pay Commission",
address = "UK United Kingdom",

}

TY - BOOK

T1 - Beyond the wage

T2 - Changes in employment and compensation patterns in response to the national minimum wage

AU - Papps, Kerry L.

AU - Gregg, Paul

PY - 2014/3/13

Y1 - 2014/3/13

N2 - This study examines whether the national minimum wage has changed aspects of individuals’ work arrangements, other than just their hourly wage, drawing on data from the Annual Survey of Hours and Earnings and the Labour Force Survey. In contrast to earlier U.K. studies, the analysis includes worker fixed effects, thereby controlling for all time-invariant factors that influence employment outcomes. The results indicate that the minimum wage has a negative effect on a person’s likelihood of remaining in the same job, although its effect on the probability of exiting employment altogether is modest, since many workers change firms within a year of a minimum wage rise. Among those who remain with the same employer, the minimum wage reduces hours and weeks of work. It has little effect on levels of non-basic pay, the use of temporary contracts or flexible employment arrangements or the provision of pensions. Measurement error and the shortness of the panel in the Labour Force Survey limit the ability to derive accurate estimates using these data.

AB - This study examines whether the national minimum wage has changed aspects of individuals’ work arrangements, other than just their hourly wage, drawing on data from the Annual Survey of Hours and Earnings and the Labour Force Survey. In contrast to earlier U.K. studies, the analysis includes worker fixed effects, thereby controlling for all time-invariant factors that influence employment outcomes. The results indicate that the minimum wage has a negative effect on a person’s likelihood of remaining in the same job, although its effect on the probability of exiting employment altogether is modest, since many workers change firms within a year of a minimum wage rise. Among those who remain with the same employer, the minimum wage reduces hours and weeks of work. It has little effect on levels of non-basic pay, the use of temporary contracts or flexible employment arrangements or the provision of pensions. Measurement error and the shortness of the panel in the Labour Force Survey limit the ability to derive accurate estimates using these data.

KW - Minimum wage

UR - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/289426/GreggPappsBATH_Beyond_the_wage_FINAL.pdf

UR - https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/289426/GreggPappsBATH_Beyond_the_wage_FINAL.pdf

M3 - Commissioned report

BT - Beyond the wage

PB - Low Pay Commission

ER -