| Practice area: | Education and Labour Markets | Labour market economics | Labour markets | Public Policy |
|---|---|
| Client: | Low Pay Commission |
| Published: | February, 2016 |
| Keywords: |
London Economics were commissioned by the Low Pay Commission to undertake an assessment of the ‘bite’ of the minimum wage. The first phase involved a statistical analysis to build an in-depth understanding of how the earnings distribution has changed over time in relation to changes in the National Minimum Wage (NMW), and how the distribution varies by industry, geographical location, size of firm, sector (private or public) and age.
The second phase consisted of an econometric analysis exploring the impact of the NMW on earnings, the ‘bite’ and wage differentials, using a difference-in-difference (DID) approach. In addition, we investigated whether wages and differentials reflect skills and productivity differences by sector, using a fixed effects estimation.