Log in
Research by Alan Manning and colleagues at LSE's Centre for Economic Performance (CEP) has contributed to widespread acceptance of the view that minimum wages set at an appropriate level are a valuable tool of public policy. CEP researchers had a direct impact on the design of the UK's National Minimum Wage (NMW) and thus on the living standards of poorer workers and their families. They provided the intellectual context for the policy, advised on its implementation and evaluated its effects. CEP research has had some initial impact on the introduction of the minimum wage in Hong Kong. It has also influenced debates around the world about the introduction or modification of minimum wages.
Professor Mark Stewart analysed the impact of the National Minimum Wage (NMW), providing a research-based answer to the question of whether a minimum wage would protect low skilled workers or leave them worse off by reducing demand for labour. Stewart analysed the NMW after it was introduced in 1999 and through subsequent upratings and consistently found negligible employment effects, modest hours effects, and little evidence of spillover effects. Stewart published reports and journal publications, supplying evidence that directly assisted the Low Pay Commission's (LPC) policy decisions. The minimum wage is now established policy, increasing earnings for millions of the UK's lowest-income workers and reducing income inequality and the gender pay gap.
Research on the economic effects of minimum wages undertaken by Professor Stephen Machin and his co-authors changed the policy context before a National Minimum Wage (NMW) was introduced in April 1999. That and subsequent research, as well as Machin's appointment as Commissioner in 2007, have provided the guiding logic for the operations of the Low Pay Commission, the government body that makes recommendations on setting the NMW. As a result, research has directly influenced the annual setting of the NMW through 2008-2013, affecting the wages of over a million low-paid UK workers. Research has subsequently influenced policy debate in the UK, and in other countries including Germany, Hong Kong and Australia.
Around 55,000 young workers in Britain have benefited from a 20 per cent wage increase as a direct result of research by Richard Dickens of the University of Sussex. His work led to a legislative change (which became effective in October 2010) whereby the starting age for eligibility for the adult National Minimum Wage (NMW) was reduced from 22 to 21 years old.
More generally, Dickens' research on the wage and employment effects of the NMW has long informed the recommendations of the Low Pay Commission (LPC) — on the rate at which the NMW is set, on the associated regulations and on the LPC's evaluation of the impact of the NMW. His research has provided the LPC and the government with strong validation for the use of the NMW as a policy tool for tackling low incomes and wage inequality. It also allays fears that the NMW might lead to a damaging wage-price spiral.
Since 2001, research by Jane Wills has exposed the problem of low pay and in-work poverty in London, explored the potential solution offered by a living wage, and underpinned a successful campaign by London Citizens — an alliance of community organisations — for a living wage in the capital. As a result of the campaign, there are now 400 accredited employers who pay a living wage and up to 45,000 workers across the UK who have benefitted. In 2008, persuaded by Wills' research, Queen Mary became the first university in the UK to adopt the living wage. Now, almost all HEIs in London do the same. Wills has presented her research at the House of Commons (2009, 2012), the Marmot Enquiry (2009), and has spoken alongside Ed Miliband to support the living wage during his leadership election campaign (2010). The Labour Party supports the living wage as its policy response to in-work poverty and it will feature in the Party Manifesto ahead of the next general election. The research has focused mainly on London, yet the findings have relevance nationally and internationally, informing campaigns in Birmingham, Brighton, Glasgow, Nottingham, Wales, Canada and New Zealand.
Southampton based research on the interactions of a minimum wage policy and tax evasion has had a direct and clearly acknowledged impact on shaping the labour market policies of Hungary and other Southern European countries, while its research on the role of universal versus targeted benefits on employment has had a significant impact on Swedish fiscal policy. Looking at labour market policies in a broader context and from a behavioural economics point of view (e.g. payroll giving), our findings on charitable giving and workers' motivation have also been used by the UK government's Behavioural Insights Team and impacted its recommendations on giving. The same research is currently influencing US policy on the tax treatment of charitable contributions.
Research at UCL provided the primary analysis of the effects of immigration on wages and the fiscal costs and benefits of A8 migration to the UK. These provided important and ongoing contributions to policy and media debates in the UK, as demonstrated by citations in key debates and policy documents in both Houses of Parliament, in commissioned studies and in the financial press. As a result, research successfully put facts and figures on immigration into a highly emotional and partisan debate.
The research for the Low Pay Commission was designed to investigate whether the enforcement of the UK's national minimum wage was effective, through the experiences of workers and employers. It showed that despite the law, only a minority of workers found to have been underpaid received their arrears in full and without detriment. The LPC subsequently called upon the government to amend the legislation to provide a more significant deterrent to non-compliance on payment of arrears. This change was implemented through the Employment Act 2008. As a result £722,000 in arrears has been paid and 1,417 workers have benefited.
Professor Pedro Martins' research expertise is on labour economics, including dismissals, wages and social returns of education. From June 2011 until February 2013, he was seconded from Queen Mary to undertake the key role of Portuguese Secretary of State for Employment. Informed by his research, he initiated and implemented a programme of effective labour market legislative reforms over a relatively short period of time. A reformed labour code (four changes of law) and several ordnances, resolutions and other policy change were the outcome, affecting individual dismissals, working time, collective bargaining, training and active labour market policies. His aim was to reduce unemployment by partly deregulating the labour market, so reducing the disincentives for firms to employ people, and by promoting active labour market policies to raise skill levels within the economy. The reforms affected approximately five million people. Following the reforms, Portugal moved to eighth place (in 2009 it was first) out of 34 countries in terms of the strength of permanent employees' protection (OECD Employment Outlook 2012); and unemployment fell, from 17.7% to 15.6%, and GDP increased, by 1.3%, between the first and third quarters of 2013.
European employment research at Manchester Business School's European Work and Employment Research Centre (EWERC) has had a significant impact on international policymaking bodies, specifically the European Commission (EC), the European Trade Union Confederation (ETUC) and the International Labour Organisation (ILO). Demonstrated policy impact includes: the defining and strengthening of a gender mainstreaming and gender pay policy in Europe; technical improvements in the European Commission's approach to the European Employment Strategy (EES) (which all EU member states are required to report on and implement); and greater precision (regarding up-to-date data and the functioning of labour market institutions) in EC and ILO policy recommendations on low wage work, minimum wages and regulation for decent work.