Since the announcement of the abolition of minimum wages in agriculture in the UK in July 1994 (following the abolition of the Wage Boards in 1993), there has been a growing interest in the impact on wages and employment of minimum wage regulation. In Discussion Paper No. 1021, Robin Gowers and Research Fellow Timothy Hatton examine the effects on wages and employment of the minimum wage in British agriculture during the interwar period. They observe the effects of the introduction of a minimum wage instead of focusing on small variations in an existing minimum wage as most post-war studies have done.

The authors find that the impact of regulation was to raise the wage for agricultural labourers by about 15% in the late 1920s and by more than 20% in the 1930s. The employment elasticity of changes in the wage over the period spanning the introduction of the Agricultural Wage Act is estimated at around –0.55. While the minimum wage lifted many families of farm labourers who remained employed, out of poverty, it did significantly lower incomes of farmers, particularly during the 1930s.

The Origins and Early Impact of the Minimum Wage in Agriculture
Robin Gowers and Timothy J Hatton

Discussion Paper No. 1021, September 1994 (HR)