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Behavioural aspects of the national minimum wage: Measuring and interpreting behaviour in the low-wage labour market

Fry, Suzanne; Ritchie, Felix

Authors

Suzanne Fry



Abstract

Report for LPC on how low pay is measured in official data sources. Finds that (a) employers tend to 'round' hourly pay rates, suggesting scope for rent-sharing in these low-paying jobs, and/or high transactions costs associated with wage-setting; and (b) employees questioned about wage rates tend to round them up or down to the nearest 'focal point' (eg £5.05 is rounded down to £5.00, £4.98 is rounded up to £5.00), implying significant - but predictable - measurement error in household survey data.

Citation

Fry, S., & Ritchie, F. (2013). Behavioural aspects of the national minimum wage: Measuring and interpreting behaviour in the low-wage labour market. UK

Publication Date Aug 7, 2013
Publicly Available Date Mar 28, 2024
Peer Reviewed Peer Reviewed
Keywords national minimum wage, measuring, behaviour, low-wage, labour market
Public URL https://uwe-repository.worktribe.com/output/929129
Publisher URL https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/226829/Behavioural_aspects_of_the_National__Minimum_Wage.pdf
Related Public URLs https://eprints.uwe.ac.uk/secure/22501/1/behavioural-aspects-of-the-national-minimum-wage.htm

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