National Minimum Wage

National Minimum Wage
2.94 In contrast to the individual results explained above, their spatial analysis found no strong
evidence of adverse effects of the minimum wage on employment or unemployment. This
was despite the large increases in wages at the bottom of the distribution relative to those
higher up. Indeed, their findings suggested that the minimum wage may have had some
positive effects on employment between 2003 and 2007 (the period of large upratings).
They also found evidence that the minimum wage had reduced unemployment in these
years.
2.95 Bryan, Salvatori and Taylor (2012) used individual data to assess the impact of the minimum
wage on employment, unemployment and hours. In line with previous research findings,
they found little evidence that the minimum wage had affected employment retention in the
period before or during the recession. They found no consistent effect of the minimum wage
on hours for adults across the years, although they did find some weakly significant evidence
in some specifications of a reduction in basic hours of around 2-4 hours for both men and
women following the 2010 minimum wage uprating. They did, however, find some evidence
of a significant negative effect on hours among youths (aged 18-21 years old), with basic
hours reduced by around 3-4 hours during the recession (2008-2010). They found similar
effects for the 2003-2007 upratings, but these effects appeared stronger and more robust
during the recession. However, they cautioned that these results for young workers were
based on small sample sizes. The research also found that the minimum wage had no effect
on the probabilities of unemployed adults entering work in any year. They concluded that
there was little evidence that the recession had increased the sensitivity of employment to
increases in the minimum wage. But their findings added to the existing literature that the
minimum wage may have had an impact on hours, especially for young workers.
2.96 Previous research using individual data had generally come to similar conclusions that the
introduction of the minimum wage and subsequent upratings had not adversely affected
employment. Stewart (2001, 2003, 2004a and 2004b) found no evidence of an adverse
impact of the introduction of the minimum wage and its initial upratings on employment.
Dickens and Draca (2005) looked at the large upratings in 2003 and 2004 on individual
employment transitions. Dickens, Riley and Wilkinson (2009) examined the employment
effects of the 2003-2006 minimum wage upratings and Mulheirn (2008) also looked at the
2006 upratings. None of these studies found any adverse employment effects.
2.97 In contrast, the research investigating the impact on hours using individual data has been
more mixed. Connolly and Gregory (2002) found a negative but not significant effect of the
introduction of the minimum wage. Stewart and Swaffield (2004), using a longer time span of
data found significant adverse effects on hours from the introduction of the minimum wage.
Dickens, Riley and Wilkinson (2009) also found evidence that hours had been reduced in
some years and in some econometric specifications but, unlike Stewart and Swaffield, their
results were not robust. In contrast, Robinson and Wadsworth (2007) found no evidence that
the minimum wage had affected the incidence of second job-holding or the hours worked in
second jobs.
2.98 Dolton, Rosazza Bondibene and Stops (2012) conducted spatial analysis to look at the impact
on employment. They found that the minimum wage had no adverse impact on local area
employment and may even have had a positive effect in some years. Further, this result
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