The UK national minimum wage’s impact on productivity

Rizov, Marian and Croucher, Richard and Lange, Thomas (2016) The UK national minimum wage’s impact on productivity. British Journal of Management, 27 (4). pp. 819-835. ISSN 1045-3172

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Low pay poses issues for managers internationally. We examine productivity in low-paying sectors in Britain, since the national minimum wage’s (NMW) introduction. We use a multiple channel analytical strategy, emphasising the wage incentives channel and linking it to a model of unobserved productivity. We estimate firm-specific productivity measures and aggregate them to the level of low-paying sectors. Difference-in-differences analysis illustrates that the NMW positively affected aggregate low-paying sector productivity. These findings highlight increased wages’ incentive effects with implications for management practice and public policy since ‘living’ wages may be productivity enhancing.

Item Type: Article
Additional Information: Version of record online: 23 May 2016
Keywords (uncontrolled): minimum wage, incentives, productivity, UK
Research Areas: A. > Business School
Item ID: 19004
Notes on copyright: © 2016 The Authors British Journal of Management published by John Wiley & Sons Ltd on behalf of British Academy of Management This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.
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Depositing User: Bernadett Dunn
Date Deposited: 11 Mar 2016 11:48
Last Modified: 06 Sep 2018 05:04

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