The potential impact of the minimum wage in rural areas

This article explores the extent to which the potential impact of the natio nal minimum wage might differ in rural areas. Using pre-1999 data from the British Household Panel Survey, a number of dimensions of the policy's pote ntial impact in rural areas are considered, in particular, the number of wo rkers affected, their typical characteristics, and the effects on pay inequ ality and household income distribution. The results show that for the majo rity of rural areas that are accessible to urban labour markets, the impact is likely to be broadly similar. In contrast, the potential impacts, and p articularly the distributional effects, of the national minimum wage are fo und to be greatest in remoter rural areas.