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The UK minimum wage at 22 years of age: a regression discontinuity approach
Author(s) -
Dickens Richard,
Riley Rebecca,
Wilkinson David
Publication year - 2014
Publication title -
journal of the royal statistical society: series a (statistics in society)
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.103
H-Index - 84
eISSN - 1467-985X
pISSN - 0964-1998
DOI - 10.1111/rssa.12003
Subject(s) - regression discontinuity design , unemployment , economics , minimum wage , regression , wage , discontinuity (linguistics) , percentage point , unemployment rate , demographic economics , regression analysis , survey data collection , labour economics , statistics , mathematics , macroeconomics , mathematical analysis , finance
Summary A regression discontinuity approach is used to analyse the effect of the legislated increase in the UK national minimum wage that occurs at age 22 years on various labour market outcomes. Using data from the Labour Force Survey we find an increase of 3–4 percentage points in the rate of employment of low skilled individuals. Unemployment declines among men and inactivity among women. We find no such effect before the national minimum wage was introduced and no robust impacts at age 21 or 23 years. Our results are robust to a range of specification tests.