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The national minimum wage and the substitutability between young and old workers in low paid occupations
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.ORCID iD: 0000-0001-9244-7018
2017 (English)In: Manchester School, ISSN 1463-6786, E-ISSN 1467-9957, Vol. 85, no 5, 601-633 p.Article in journal (Refereed) Published
Abstract [en]

We study the effect of the National Minimum Wage (NMW) on the work force age composition within the low paying sectors of the British economy. Our interest is in the degree of substitutability between labour inputs (young and old employees). We find evidence that both the introduction and the regular upratings of the NMW have a significant effect on the observed changes to the relative wages and tothe relative wage bills but not to relative employment. We estimatethe elasticity of substitution, between “young” age groups and older workers (55+) to be zero, while that of “prime” (22+) age and older workers, to be around 0.79. Our estimates therefore imply significant complementarity between younger and old employees.

Place, publisher, year, edition, pages
John Wiley & Sons, 2017. Vol. 85, no 5, 601-633 p.
Keyword [en]
labour substitution, minimum wages
National Category
Economics
Identifiers
URN: urn:nbn:se:umu:diva-121165DOI: 10.1111/manc.12168ISI: 000407073400004OAI: oai:DiVA.org:umu-121165DiVA: diva2:931402
Available from: 2016-05-27 Created: 2016-05-27 Last updated: 2017-10-06Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
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  • de-DE
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