Essays on Minimum Wages: an Evaluation of their Impact on Labour Market Outcomes

This thesis evaluates the impact of minimum wages on labour market outcomes, exploiting variation in its "bite" across areas and years. In the UK, a National Minimum Wage (NMW) was introduced in 1999 and has been up-rated each year since. This rather extended length of time since implementation constitutes an opportunity to take a retrospective look at the impact of this policy. Identification is based on variation in the "bite" of the NMW across local labour markets and the different sized year on year up-ratings. An "Incremental Difference-in- Differences" (ID iD) model is used in which each year's change in the NMW is considered as a separate interaction effect. This IDiD procedure allows one to evaluate the year-on-year impact of the up-rating of the NMW on different labour market outcomes. The effect of the NMW on UK wage inequality is also assessed. In order to identify the effect of this policy on the distribution of earnings, the strategy applied in the US by Lee (1999) and more recently by Autor et al (2010) is used. Variation in the relative level of the NMW across local areas is exploited in order to disentangle the NMW effect from movements in latent wage dispersion. Finally, new estimates of the employment effects of the Minimum Wage (MW) are produced focusing on a panel of 33 OECD and European countries for the period 1971- 2009. Cross-national variation in the level and timing of the MW up-rating is exploited. The panel allows one to take into account the institutional and other policy related differences that might have an impact on employment other than the MW. It also allows one to differentiate the effect of the MW on employment in periods of economic downturn as well as in periods of economic growth, exploiting the exact timing of the recessionary experiences in different countries. 3EThOS - Electronic Theses Online ServiceGBUnited Kingdo

Sources of Labour Productivity Growth at Sector Level in Britain, 1998-2007: a Firm-Level Analysis

This article focuses on the sources of labour productivity at a disaggregated sector level using a range of methods for decomposition, including the dynamic Olley-Pakes decomposition method introduced by Melitz and Polanec (2015) which offers an alternative approach to the standard dynamic decomposition developed by Foster, Haltiwanger and Krizan (2001). Our findings indicate that at the firm level, entry and exit played a relatively minor role in improving labour productivity growth in Britain between 1998-2007, although this masks a great deal of variability in the performance of entrants and exitors. A much more significant contribution to labour productivity throughout the period was achieved through the market share growth of incumbent firms with above average productivity. The interpretation of findings is sensitive to underlying assumptions and the approach adopted

A study of patent thickets

Report analysing whether entry of UK enterprises into patenting in a technology area is affected by patent thickets in the technology area

Productivity dynamics in the Great Stagnation: evidence from British businesses

We investigate labor productivity dynamics amongst British businesses in the wake of the credit crisis of 2007/8. The external restructuring of firms (i.e. changes in market share, firm entry and exit) contributed to a fall in productivity growth relative to trend amongst small businesses in bank dependent industries, consistent with the idea that an adverse credit supply shock caused inefficiencies in resource allocation across firms. But, the major part of the decline in UK productivity growth following the credit crisis was accounted for by a widespread productivity shock within firms, pointing to the importance of other factors in explaining the Great Stagnation

The international experience of minimum wages in an economic downturn

What should governments do with the level of the minimum wage (MW) in times of recession? In an economic downturn when most workers face falling real wages is it appropriate to let the MW fall or are the positive effects of the MW on inequality enough to justify its uprating - and if so what might be the consequences on a country's employment level? This paper reports new estimates of the employment effects of the MW by focusing on the recessionary experiences across countries. Using international data we exploit: cross-national variation in the level and timing of the MW uprating and the exact timing of the recessionary experiences in different countries with a panel data set comprising 33 OECD over the period 1971-2009. Our panel data allow us to differentiate the effect of MWs on employment in periods of economic downturn as well as periods of economic growth. We also account for institutional and other policy related differences that might have an impact on employment other than the MW. We find that the answer depends on whether one considers adults or young people, and to some extent, on what measure of the MW is considered. The answer is also somewhat sensitive to whether one considers that the MW level is a choice option of the government which is inextricably interrelated to the determination of employment - that is, the extent to which the MW is endogenous. Using a 'political complexion of the government' instrumental variable (IV) we find that the MW only has a negative impact on youth employment. This leaves each government with the dilemma of raising the MW and reducing inequality or increasing the MW and accepting that this will reduce employment levels amongst young people and those on the margins of work

A Service of zbw Leibniz-Informationszentrum Wirtschaft Leibniz Information Centre for Economics Employment, Inequality and the UK National Minimum Wage over the Medium-Term Employment, Inequality and the UK National Minimum Wage over the Medium-Term

Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen. Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S IZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. This paper assesses the impact of the National Minimum Wage (NMW) on employment and inequality in the UK over the decade since its introduction in 1999. Identification is facilitated by using variation in the bite of the NMW across local labour markets and the different sized year on year up ratings of the NMW. We use an 'incremental differences-in-differences' (IDiD) estimator which allows us to estimate the effects of the NMW in each year since its introduction. We find that an increased bite of the NMW is associated with falls in lower tail wage inequality. Moreover, while the average employment effect of the NMW over the entire period is broadly neutral, there are small but significant positive employment estimates from 2003 onward, when the average bite of the NMW was at its highest since its introduction. JEL Classification: J0, J2, J

Identifying the employment effect of invoking and changing the minimum wage: a spatial analysis of the UK

This paper assesses the impact of the National Minimum Wage (NMW) on employment in the UK over the 1999-2010 period explicitly modelling the effect of the 2008-2010 recession. Identification of invoking a NMW is possible by reference to a pre-period (prior to 1999) without a NMW. Separate identification of the effect of incremental changes (and year interaction effects) in the NMW is facilitated by variation in the bite of the NMW across local labour markets. We address the issues of possible endogeneity and dynamic structure of employment rate changes, regional demand side shocks induced by the recession, and take account of the spatial dependence of local labour markets. Using system GMM, we conclude that there is no discernable effect of the NMW introduction or its uprating on employment but show how more naïve estimation may have revealed the various widely different positive and negative effects found in the literature

Employment, inequality and the UK national minimum wage over the medium-term

We assess the impact of the national minimum wage (NMW) on employment and inequality in the UK over the decade since its introduction. We evaluate its effects in each year, using an incremental differences-in-differences (IDiD) estimator. Identification is based on variation in the bite of the NMW across local labour markets and the different sized year on year up-ratings. We find that an increased bite of the NMW is associated with falls in lower tail wage inequality. While the average employment effect over the entire period is broadly neutral, there are small but significant positive NMW effects from 2003 onwards