Minimum wages are often advocated as tools to alleviate poverty as long as they are not set so high that they reduce employment. Because women are more likely than men to work in low paid jobs, minimum wages can also help to reduce the gender pay gap. This study examines how the gender wage gap changed following the introduction of the National Minimum Wage in Ireland in 2000 and the United Kingdom (UK) in 1999.
Women are disproportionately in low?paid work compared to men so, in the absence of rationing effects on their employment, they should benefit the most from minimum wage policies. This study examines the change in the gender wage gap around the introduction of minimum wages in Ireland and the United Kingdom (U.K.). Using survey data for the two countries, we develop a decomposition of the change in the gender differences in wage distributions around the date of introduction of minimum wages. We separate out “price” effects attributed to minimum wages from “employment composition” effects. A significant reduction of the gender gap at low wages is observed after the introduction of the minimum wage in Ireland, while there is hardly any change in the U.K. Counterfactual simulations show that the difference between countries may be attributed to gender differences in non?compliance with the minimum wage legislation in the U.K.
SOURCE: Karina Doorley “Minimum wages and the gender gap in pay.” ESRI, December 7, 2018.
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