DP1021 The Origins and Early Impact of the Minimum Wage in Agriculture

Author(s): Robin Gowers, Timothy J. Hatton
Publication Date: September 1994
Keyword(s): Agriculture, Minimum Wage
JEL(s): J31, J43, N34, N44
Programme Areas: Human Resources
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=1021

This paper examines the effects on wages and employment of the minimum wage in agriculture in the United Kingdom during the interwar period. We find that the impact of regulation was to raise the wage for agricultural labourers by 13% when it was (re)introduced in 1924, by 15% in the late 1920s, and by more than 20% in the 1930s. The effect on farm employment was to reduce it by about 54,000 (6.5%) in 1929 up to a peak of 97,000 (13.3%) in 1937. The minimum wage lifted many families of farm labourers who remained employed out of poverty, but it significantly lowered the incomes of farmers, particularly during the 1930s.