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Estimating the Impact of the Minimum Wage Using Geographical Wage Variation *
Author(s) -
Stewart Mark B.
Publication year - 2002
Publication title -
oxford bulletin of economics and statistics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.131
H-Index - 73
eISSN - 1468-0084
pISSN - 0305-9049
DOI - 10.1111/1468-0084.64.s.2
Subject(s) - wage , differential (mechanical device) , distribution (mathematics) , minimum wage , economics , low wage , variation (astronomy) , labour economics , efficiency wage , compensating differential , demographic economics , wage share , mathematical analysis , physics , mathematics , astrophysics , engineering , aerospace engineering
This paper evaluates the impact on employment of the UK's introduction of a minimum wage in 1999 by exploiting the geographical variation in wages, which meant that the minimum wage's ‘bite’ into an area's wage distribution differed considerably across the country. The results indicate that, although the minimum wage had differential wage‐distribution effects across the 140 areas of the country, employment growth after its introduction was not significantly lower in areas of the country with a high proportion of low‐wage workers, whose wages had to be raised to comply, from that in areas with a low proportion of such workers.