Minimum Wages in a Low-Wage Labour Market: Care Homes in the UK

8 Pages Posted: 7 Oct 2004

See all articles by Stephen J. Machin

Stephen J. Machin

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

Joan Wilson

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

Abstract

This paper studies the economic effects of minimum wages in a sector that is very vulnerable to minimum wage legislation, the UK care homes sector. We study the effects of the introduction of the National Minimum Wage (NMW) in April 1999 on wages and employment before and after minimum wage introduction and before and after the subsequent increase of the minimum wage in October 2001. We also study home closures between 1999 and 2001. The results show sizeable wage effects and some evidence of employment reductions but we are unable to detect any effect on home closure.

Suggested Citation

Machin, Stephen J. and Wilson, Joan, Minimum Wages in a Low-Wage Labour Market: Care Homes in the UK. Available at SSRN: https://ssrn.com/abstract=547504

Stephen J. Machin (Contact Author)

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

Houghton Street
London WC2A 2AE
United Kingdom

London School of Economics & Political Science (LSE) - Department of Economics ( email )

Houghton Street
London WC2A 2AE
United Kingdom

Joan Wilson

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

Houghton Street
London WC2A 2AE
United Kingdom

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