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The UK National Minimum Wage's Impact on Productivity

Rizov, Marian; Croucher, Richard; Lange, Thomas


Marian Rizov

Richard Croucher

Thomas Lange


Low pay poses issues for managers internationally. We examine productivity in low-paying sectors in Britain, since the introduction of the National Minimum Wage (NMW). We use a multiple channel analytical strategy, emphasizing 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 wage incentive effects with implications for management practice and public policy since ‘living’ wages may be productivity enhancing.


Rizov, M., Croucher, R., & Lange, T. (2016). The UK National Minimum Wage's Impact on Productivity. British Journal of Management, 27(4), 819-835.

Journal Article Type Article
Acceptance Date Mar 8, 2016
Online Publication Date May 23, 2016
Publication Date 2016-10
Deposit Date Nov 25, 2021
Publicly Available Date Nov 25, 2021
Journal British Journal of Management
Print ISSN 1045-3172
Electronic ISSN 1467-8551
Publisher Wiley
Peer Reviewed Peer Reviewed
Volume 27
Issue 4
Pages 819-835
Public URL


The UK National Minimum Wage's Impact On Productivity (<nobr>329 Kb</nobr>)

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Copyright Statement
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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