The Impact of the National Minimum Wage in Small Firms
University of Warwick - Department of Computer Science
Mark W. Gilman
University of Kent, Canterbury
Paul K. Edwards
University of Warwick - Warwick Business School
De Montfort University - School of Business
British Journal of Industrial Relations, Vol. 41, pp. 435-456, September 2003
The introduction of the National Minimum Wage (NMW) had potentially significant implications for small firms. Orthodox economic theory predicts adverse consequences, though institutional analysis points to potential efficiency as well as fairness effects. Using longitudinal data on 55 firms, this paper examines the impact of the NMW in small firms in clothing manufacture and hotel and catering. Different patterns of adjustment were observed, explained by both size and sector characteristics. Overall, the impact of the NMW was mediated by the informality of employment relations in the small firm.
Number of Pages in PDF File: 22Accepted Paper Series
Date posted: September 22, 2003
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