THE EFFECT OF MINIMUM-WAGES ON UK AGRICULTURE

Since the abolition of the Wages Councils in September 1993, agriculture is the only sector in the UK economy covered by any form of minimum wage legislation. However, the recent denunciation of an ILO convention covering minimum wages in agriculture has paved the way for the abolition of the Agricultural Wages Boards. This paper investigates the impact of the system of minimum wages on the level and structure of earnings and employment in agriculture. On wages, our main conclusion is that the minimum wages set by the Agricultural Wages Boards are important determinants of the average level and distribution of earnings in UK agriculture. On employment, our main conclusion is that there is no evidence that minimum wages have reduced the level of employment in agriculture. If anything, our estimates imply a weak positive, though statistically insignificant, impact of minimum wages on employment. This seems to be true when we disaggregate by sex and skill.