Arbeitspapier
Does the employment effect of National Minimum Wage vary by non-employment rate? A Regression Discontinuity approach
We examine the impact of increasing minimum wage on employment by exploiting variation in the age-dependent National Minimum Wage (NMW) in the UK. We extend the Regression Discontinuity model to evaluate the procyclicality of employment effect and show that previous estimates may be biased due to failure to account for the local non-employment rate. Contrary to the existing literature, we report a positive employment elasticity after accounting for the effect of local labour market conditions. The results suggest that the positive employment effect of increasing minimum wage is strongly procyclical, i.e. is more pronounced in areas with low non-employment rates. Under an assumption that employers have no direct impact around the cut-off point, the results suggest that a higher minimum wage increases labour supply of young workers.
- Language
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Englisch
- Bibliographic citation
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Series: GLO Discussion Paper ; No. 1109
- Classification
-
Wirtschaft
Time Allocation and Labor Supply
- Subject
-
minimum wage
macroeconomic fluctuation
regression discontinuity
age dependent
procyclicality
- Event
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Geistige Schöpfung
- (who)
-
Xu, Lei
Zhu, Yu
- Event
-
Veröffentlichung
- (who)
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Global Labor Organization (GLO)
- (where)
-
Essen
- (when)
-
2022
- Handle
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Xu, Lei
- Zhu, Yu
- Global Labor Organization (GLO)
Time of origin
- 2022
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