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National Minimum Wage


The introduction of a national minimum wage is increasingly debated in many countries across the World: the latest countries to adopt it have been South Africa in 2017 and Germany in 2015. Other countries have already introduced it sometime ago. The UK introduced it in 1999 and has now introduced the National Living Wage from April 2016.

A newly appointed Minister for Work and Pensions, with no knowledge on this subject, will be meeting her counterparts at an international summit, where she has been asked to brief them on the UK experience so far. The Minister has asked you to:

  • Clarify what is the economic rationale behind the introduction of the minimum wage? What are the economic theories in favour and against the introduction of the minimum wage? (40%)
  • What evaluation can be made of the UK experience? (40%)
  • What conclusions would you draw on the introduction of the minimum wage and lessons for other countries? (20%).

The essay will have to be of 5,000 words.

Students should also note that over-lengthy reports will also be penalised:

5,000-5,500 words:  no penalty

5,501-6,000 words:  10% penalty

6,001-7,000 words:  20% penalty

These word limits exclude an Executive Summary, References, Title Page, Table of Content, List of Figures. The word count should be given at the end of the project.


It should be stressed that this is a major project.

To obtain a high mark you will be expected to demonstrate:

  • original thought,
  • research, wide reading and
  • the application of high-quality economic analysis.

In assessing your projects, the marker will be looking for:

  1. Evidence of understanding the economic principles, concepts, theories and the policy issues.
  2. Addressing adequately all elements required by the question.
  3. Degree of analysis and clarity of arguments.
  4. Appropriate use of diagrams when necessary.
  5. Appropriate style and presentation.

A good project is likely to have the following (as a guide):

  1. Executive summary: roughly one page, set out as bullet points. Should set out the key questions and your conclusions and recommendations. Doesn’t need necessarily the methodology. Remember that the policy maker/public may not read beyond this, so it is important to get this right. Have a look at Executive Summaries from existing government/international organisation reports.   
  2. Introduction: this sets out the main issues and approaches to be adopted.
  3. The structure of the question gives you a guide to what might be the next sections (the main body of the report).
  4. Conclusions: this summarises the key messages and findings. No new information should be here!

Task in detail

Sub-question 1 - 40%

You are asked to set out the economic rationale for the minimum wage;

  • Keep in mind the background context: The Minister is not very knowledgeable about this and needs to brief other EU Ministers;
  • She wants to understand the theory behind the NMW and which economic approaches explain it.
  • This is both analytical and descriptive. What are the different approaches in theory and what do they say about the rationale for Government intervention to establish a NMW?
  • Presentation is key here. Try to put yourself in the Minister’s shoes: she will possibly read this document at night. You need to be succinct but also clear and accurate.

Sub question 2- 40%

You are asked assess the UK experience since the introduction of the NMW in 1999.

  • This is also analytical and descriptive. You need to focus on the UK experience. Therefore, do carefully describe what happened in the UK and how the policy has evolved.
  • You need to review the evidence on the impact of the minimum wage on the key variables of concern, linking this to the first question about the economic theories.
  • Material from the additional set of slides in Topic 8 is a very good starting point.
  • Again, presentation is important: be to the point, but clear and accurate!

Sub question 3- 20%

You are asked to draw conclusions on the introduction of the minimum wage and lessons for other countries?

  • Here again, do not forget the background context: The Minister needs to brief other Ministers.
  • There are two related aspects to the question but both need to be addressed: conclusions on the UK experience and applicability to other countries.
  • Most importantly, your recommendations would need to rest on sound and robust analysis and evidence.
  • You therefore need to link this part very clearly to the previous ones

References should be in Harvard style

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