New research by Frontier Economics, published by the UK’s Low Pay Commission (LPC), finds no evidence that an increase in the hourly minimum wage for apprentices has reduced overall apprenticeship numbers, though possible negative impacts are found in selected sectors. Frontier’s analysis was part of the research commissioned to inform the LCP Research for 2017, which was launched yesterday.
Frontier’s report focuses on an increase in the Apprentice Rate from £2.73 to £3.30 per hour in October 2015. The Apprentice Rate is the minimum wage paid to apprentices aged 16 to 18, or older apprentices in the first year of their apprenticeship. Frontier, in collaboration with Professor Stephen Machin (London School of Economics), found no evidence that the increase in the Apprentice Rate reduced apprenticeship numbers overall. However, there was suggestive evidence that apprenticeship numbers in selected sectors such as hairdressing could have been negatively affected.
The LPC is an independent body that advises the government on the National Living Wage and National Minimum Wage. The LPC have recommended that the Apprentice Rate be increased to £3.70 per hour (from its current rate of £3.50) from April 2018.
Frontier regularly advises clients in the private and public sectors on issues relating to education, skills and labour markets.
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