Hostname: page-component-cd9895bd7-dzt6s Total loading time: 0 Render date: 2024-12-25T19:26:57.249Z Has data issue: false hasContentIssue false
  • English
  • Français

Still Evidence-Based? The Role of Policy Evaluation in Recession and Beyond: The Case of the National Minimum Wage

Published online by Cambridge University Press:  26 March 2020

Tim Butcher
Tim Butcher*
Affiliation:
Low Pay Commission
*
1 E-mail: tim.butcher@lowpay.gov.uk
Get access Rights & Permissions [Opens in a new window]

Abstract

This article explains the role of evidence in determining the recommendations made by the Low Pay Commission (LPC) for the National Minimum Wage (NMW). First, it sets out the process of recommending the minimum wage including the role of evidence. Second, it summarises the evidence available on the impact of the minimum wage before discussing how that evidence has informed the recommendations for the adult rate of the minimum wage in the LPC's reports. It concludes by assessing the extent to which the NMW might be regarded as a success and considers whether the recent financial crisis will alter the evidence-based approach so far adopted by the LPC.

Keywords

Minimum wageswage level and structurewage distributionevaluationJ31J38
Type
Research Articles
Information
National Institute Economic Review , Volume 219 , January 2012 , pp. R26 - R40
Copyright
Copyright © 2012 National Institute of Economic and Social Research

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

I would like to thank Steve Palmer, Alex Bryson and David Wilkinson for giving me detailed and helpful comments.

JEL Classifications: J31; J38

References

Arulampalam, W., Booth, A.L., Bryan, M.L. (2004), ‘Training and the new minimum wage’, Economic Journal, 114, pp. C87–C94.CrossRefGoogle Scholar
Butcher, T. (2005), ‘The hourly earnings distribution before and after the National Minimum Wage’, Labour Market Trends, 113(10), pp. 427–35.Google Scholar
Butcher, T., Dickens, R., Manning, A. (2009), The Impact of the National Minimum Wage on the Wage Distribution, Research Report for the Low Pay Commission, Low Pay Commission; University of Sussex; and London School of Economics.Google Scholar
Churchill, W.L.S. (1906), Speech to House of Commons, Hansard, House of Commons, 155, col. 1888, 24 April.Google Scholar
Connolly, S., Gregory, M. (2002), ‘The National Minimum Wage and hours of work: implications for low paid women’, Oxford Bulletin of Economics and Statistics, 64, pp. 607–31, August.CrossRefGoogle Scholar
Cronin, E., Thewlis, M. (2004), Qualitative Research on Firms' Adjustments to the Minimum Wage: Final Report to the Low Pay Commission, November.Google Scholar
Croucher, R., Rizov, M. (2011), The Impact of the UK National Minimum Wage on Productivity by Low-paying Sectors and Firm-size Groups, Research Report for the Low Pay Commission, Middlesex University.Google Scholar
Dickens, R., Dolton, P. (2011), Using Wage Council Data to Identify the Effect of Recessions on the Impact of the Minimum Wage, Research Report for the Low Pay Commission, University of Sussex, Royal Holloway, and Centre for Economic Performance, London School of Economics.Google Scholar
Dickens, R., Draca, M. (2005), The Employment Effects of the October 2003 Increase in the National Minimum Wage, Research Report for the Low Pay Commission, February, Centre for Economic Performance, London School of Economics.Google Scholar
Dickens, R., Machin, S., Manning, A. (1999), ‘The effects of minimum wages on employment: theory and evidence from Britain’, Journal of Labor Economics, 17, 1, pp 1–23.CrossRefGoogle Scholar
Dickens, R., Riley, R., Wilkinson, D. (2009), The Employment and Hours of Work Effects of the Changing National Minimum Wage, Research Report for the Low Pay Commission, March, University of Sussex and Centre for Economic Performance, London School of Economics; and National Institute of Economic and Social Research.Google Scholar
Dickerson, A. (2007), Longer Term Implications of the NMW: A Re-examination of Employer-provided Training, Research Report for the Low Pay Commission, Department of Economics, University of Sheffield.Google Scholar
Dolton, P., Lin, L., Makepeace, G., Tremayne, A. (2011), An In-depth Assessment of the Impact of the Recession on the Distribution of Pay Settlements and Earnings, Research Report for the Low Pay Commission, Royal Holloway, University of London; London School of Economics; Cardiff University; and University of New South Wales, Australia.Google Scholar
Dolton, P., Rosazza Bondibene, C. (2011), An Evaluation of the International Experience of Minimum Wages in an Economic Downturn, Research Report for the Low Pay Commission, Royal Holloway, University of London.)Google Scholar
Dolton, P., Rosazza Bondibene, C., Wadsworth, J. (2009), The Geography of the National Minimum Wage, Research Report for the Low Pay Commission, March, Royal Holloway College, University of London.Google Scholar
Draca, M., Machin, S., Van Reenen, J. (2005), The Impact of the National Minimum Wage on Profits and Prices, Research Report for the Low Pay Commission, February, Centre for Economic Performance, London School of Economics; and University College London.Google Scholar
Draca, M., Machin, S., Van Reenen, J. (2011), ‘Minimum wages and firm profitability’, American Economic Journal: Applied Economics, 3, 1, pp. 129–51.Google Scholar
The Economist (1997), ‘Devilish details’, 5 June.Google Scholar
Experian Business Strategies (2007), Investigating the Sectoral and Regional Effects of the 2003 and 2004 National Minimum Wage Upratings, Research Report for the Low Pay Commission, February.Google Scholar
Forth, J., Harris, R., Rincon-Aznar, A., Robinson, C. (2009), The Impact of Recent Upratings of the National Minimum Wage on Competitiveness, Business Performance and Sector Dynamics, Research Report for the Low Pay Commission, February, National Institute of Economic and Social Research and University of Glasgow.Google Scholar
Forth, J., O'Mahony, M. (2003), The Impact of the National Minimum Wage on Labour Productivity and Unit Labour Costs. Research Report for the Low Pay Commission, National Institute of Economic and Social Research.Google Scholar
Galindo-Rueda, F., Pereira, S. (2004), The Impact of the National Minimum Wage on British Firms, Research Report for the Low Pay Commission, September, Centre for Economic Performance, London School of Economics; and Yale University and University College London.Google Scholar
Georgiadis, A.P. (2006), ‘Is the minimum wage efficient? Evidence of the effects of the UK National Minimum Wage in the residential care homes sector’, University of Bristol, Centre for Market and Public Organisation Working Paper Series, 06/160, August.Google Scholar
Grimshaw, D., Carroll, M. (2002), Qualitative Research on Firms' Adjustments to the Minimum Wage, Research Report for the Low Pay Commission.Google Scholar
Incomes Data Services Ltd (2011), The Impact of the National Minimum Wage on Pay Setting Since 1994, Research Report for the Low Pay Commission.Google Scholar
Low Pay Commission (1998), The National Minimum Wage, First Report of the Low Pay Commission, The Stationery Office, Cm 3976, June.Google Scholar
Low Pay Commission (2000), The National Minimum Wage, Second Report of the Low Pay Commission, The Stationery Office, Cm 4571, December.Google Scholar
Low Pay Commission (2001a), The National Minimum Wage, Third Report of the Low Pay Commission, Volume One, The Stationery Office, Cm 5075, March.Google Scholar
Low Pay Commission (2001b), The National Minimum Wage. Making a Difference: The Next Steps, Third Report of the Low Pay Commission, Volume Two, The Stationery Office, Cm 5175, June.Google Scholar
Low Pay Commission (2003), The National Minimum Wage, Fourth Report of the Low Pay Commission, Building on Success, The Stationery Office, Cm 5768, March.Google Scholar
Low Pay Commission (2004), Protecting Young Workers. The National Minimum Wage, Low Pay Commission Report 2004, The Stationery Office, Cm 6152, March.Google Scholar
Low Pay Commission (2005), National Minimum Wage, Low Pay Commission Report 2005, The Stationery Office, Cm 6475, February.Google Scholar
Low Pay Commission (2006), National Minimum Wage, Low Pay Commission Report 2006, The Stationery Office, Cm 6759. March.Google Scholar
Low Pay Commission (2007), National Minimum Wage, Low Pay Commission Report 2007, The Stationery Office, Cm 7056, March.Google Scholar
Low Pay Commission (2008), National Minimum Wage, Low Pay Commission Report 2008, The Stationery Office, Cm 7333, March.Google Scholar
Low Pay Commission (2009), National Minimum Wage, Low Pay Commission Report 2009, The Stationery Office, Cm 7611, May.Google Scholar
Low Pay Commission (2010), National Minimum Wage, Low Pay Commission Report 2010, The Stationery Office, Cm 7823, March.Google Scholar
Low Pay Commission (2011), National Minimum Wage, Low Pay Commission Report 2011, The Stationery Office, Cm 8023, April.Google Scholar
Machin, S., Manning, A., Rahman, L. (2003), ‘Where the minimum wage bites hard: introduction of minimum wages to a low wage sector, Journal of the European Economic Association, 1(1), pp. 154–80.CrossRefGoogle Scholar
Metcalf, D. (2008), ‘Why has the British National Minimum Wage had little or no impact on employment?’, British Journal of Industrial Relations, 50, 3, pp. 489–512.CrossRefGoogle Scholar
Mulheirn, I. (2008), ‘The impact of the 2006 National Minimum Wage rise on employment’, Economic & Labour Market Review, 2, 9, pp. 30–36.CrossRefGoogle Scholar
Neumark, D., Wascher, W. (2004), ‘Minimum wages, labour market institutions, and youth employment: a cross-national analysis’, Industrial and Labour Relations Review, 57, 2, pp. 223–48.CrossRefGoogle Scholar
Neumark, D., Wascher, W. (2008), Minimum Wages, CambridgeMIT Press.CrossRefGoogle Scholar
OECD (1998), ‘Making the most of the minimum: statutory minimum wages, employment and poverty’, OECD Employment Outlook, Chapter 2.Google Scholar
Robinson, H., Wadsworth, J. (2004), Did the Minimum Wage Affect the Incidence of Second Job Holding in Britain, Research Report for the Low Pay Commission, Cardiff Business School, University of Cardiff and Royal Holloway College, University of London and Centre for Economic Performance, London School of Economics.Google Scholar
Stewart, M. (2001), Estimation of the Individual-level Employment Effects of the Introduction of the National Minimum Wage, Research Report to the Low Pay Commission, University of Warwick, April.Google Scholar
Stewart, M. (2002), The National Minimum Wage and Labour Market Transitions, Research Report for the Low Pay Commission.Google Scholar
Stewart, M. (2003), Modelling the Employment Effects of the Minimum Wage, Research Report for the Low Pay Commission, January, University of Warwick.Google Scholar
Stewart, M. (2004a), ‘The employment effects of the National Minimum Wage’, The Economic Journal, 114, pp. C110–C116.CrossRefGoogle Scholar
Stewart, M. (2004b), ‘The impact of the introduction of the UK minimum wage on the employment probabilities of low wage workers’, Journal of the European Economic Association, 2, 1, pp. 67–97.CrossRefGoogle Scholar
Stewart, M. (2009), Testing for Spill-over Effects of the National Minimum Wage, Research Report for the Low Pay Commission, December, University of Warwick.Google Scholar
Stewart, M., Swaffield, J.K. (2002), The Impact of the National Minimum Wage on the Hours of Work of Low-Wage Employees, Research Report for the Low Pay Commission.Google Scholar
Stewart, M., Swaffield, J.K. (2004), The Other Margin: Do Minimum Wages Cause Working Hours Adjustments for Low-wage Workers?, Research Report for the Low Pay Commission, May, University of Warwick and University of York.Google Scholar
Swaffield, J. (2009), Estimating the Impact of the 7th NMW Uprating on the Wage Growth of Low-wage Workers in Britain, Research Report for the Low Pay Commission, University of York.Google Scholar
Wadsworth, J. (2007), Did the Minimum Wage Change Consumption Patterns?, Research Report for the Low Pay Commission, February, Royal Holloway College, University of London; and Centre for Economic Performance, London School of Economics.Google Scholar
Wadsworth, J. (2008), Did the UK Minimum Wage Affect Prices?, Research Report for the Low Pay Commission, May, Royal Holloway College, University of London; and Centre for Economic Performance, London School of Economics.Google Scholar