Push for more vocational training

The UK government made a pledge to increase the number of apprenticeships to three million by 2020 as part of a broader initiative to encourage more young people into vocational training. The minimum wage for young (16-18) apprentices was increased significantly in October 2015 and the Low Pay Commission, the body which recommends the level of the minimum wage to government, wanted to know what the effect of that has been.

Higher pay for apprentices

A higher minimum wage can have an ambiguous effect on apprentice employment: on the one hand it makes apprenticeships more attractive and may encourage more people to apply; on the other hand, it makes apprentices more expensive for employers who may choose to hire fewer apprentices. We used existing data to measure the number of apprentices, their pay, and a number of their demographic characteristics. We employed econometric techniques to check how the number of apprenticeships changed following the increase in the minimum wage. We found that the higher minimum wage did not lead to a reduction in apprenticeships.

Continued increases in minimum wages

Our work was published by the Low Pay commission in its annual report and was considered when future increase in the minimum wage for apprentices were made. The current minimum wage rate for apprentices aged under 19 stands at £3.90, up from £3.30 in 2015.