Spikes and Spill-Overs: The Impact of the National Minimum Wage on the Wage Distribution in a Low-Wage Sector

7 Pages Posted: 20 Aug 2004

See all articles by Richard Dickens

Richard Dickens

London School of Economics

Alan Manning

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP)

Abstract

The UK National Minimum Wage (NMW) has had a minimal impact on UK wage inequality because it has been set at a modest level and because aggregate evidence suggests very small spill-over effects. But the small spill-over effects might be because of the small numbers of workers affected and widespread anticipation of the introduction of the NMW might make the impact effect appear very small. This paper investigates these issues using data collected from care homes where the NMW affected 40% of workers. But we still find no evidence of large spill-over effects and very small amounts of anticipation of the NMW.

Suggested Citation

Dickens, Richard and Manning, Alan, Spikes and Spill-Overs: The Impact of the National Minimum Wage on the Wage Distribution in a Low-Wage Sector. Economic Journal, Vol. 114, No. 494, pp. C95-C101, March 2004. Available at SSRN: https://ssrn.com/abstract=547503

Richard Dickens (Contact Author)

London School of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Alan Manning

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE
United Kingdom
(44 20) 7955 6078 (Phone)

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