Since its introduction in 1999, the impact of the UK national minimum wage on a range of key indicators has been well-documented and gained wide political support. However, the introduction of the National Living Wage, which increased the wage floor for those aged 25 and over to £7.20 an hour from £6.50 in April 2016, represented a significant growth and requires additional insight into the effects of such changes on the employment and hours outcomes of low-paid workers and firms in low-paying sectors.

In light of this latest development, the report considers the effects of the UK national minimum wage on different labour market sub-groups since 1999. Overall, the findings suggest that increases in the national minimum wage had no negative employment effects on the overall UK labour market. Many of the effects following these increases were largely positive in terms of reducing pay inequality and improving the standards of living for low-paid workers.

However, a further sub-group analysis of the UK labour market found some adverse negative employment effects on certain sub-groups as a result of increases in the national minimum wage. This includes part-time employees who have endured some adverse negative employment effects compared to other labour market groups.

The study is feeding into a number of empirical studies investigating the employment effects of the national minimum wage, which have been commissioned by the Low Pay Commission, an independent body that provides recommendations on whether and how the UK's national minimum wage rate should be reviewed.