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The Effectiveness Of Minimum-Wage Increases In Reducing Poverty: Past, Present, And Future

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Author Info

  • RICHARD V. BURKHAUSER
  • JOSEPH J. SABIA

Abstract

"Extending the work of Card and Krueger, we find minimum-wage increases (1988-2003) did not affect poverty rates overall, or among the working poor or among single mothers. Despite employment growth among single mothers, most gainers lived in nonpoor families and most working poor already had wages above the proposed minimums. Simulating a new federal minimum wage of $7.25 per hour, we find 87% of workers who benefit live in nonpoor families. Poor single mothers receive 3.8% of all benefits. Expanding the Earned Income Tax Credit would far more effectively reduce poverty, especially for single mothers." ("JEL" J21, J31, J38) Copyright 2007 Western Economic Association International.

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Bibliographic Info

Article provided by Western Economic Association International in its journal Contemporary Economic Policy.

Volume (Year): 25 (2007)
Issue (Month): 2 (04)
Pages: 262-281

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Handle: RePEc:bla:coecpo:v:25:y:2007:i:2:p:262-281

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Cited by:
  1. repec:hal:cesptp:halshs-00638149 is not listed on IDEAS
  2. Michele Campolieti & Morley Gunderson & Byron Lee, 2012. "The (Non) Impact of Minimum Wages on Poverty: Regression and Simulation Evidence for Canada," Journal of Labor Research, Springer, vol. 33(3), pages 287-302, September.
  3. Sen, Anindya & Rybczynski, Kathleen & Van De Waal, Corey, 2011. "Teen employment, poverty, and the minimum wage: Evidence from Canada," Labour Economics, Elsevier, vol. 18(1), pages 36-47, January.
  4. Kapelyuk Sergey, 2014. "Impact of minimum wage on income distribution and poverty in Russia," EERC Working Paper Series 14/03e, EERC Research Network, Russia and CIS.
  5. repec:hal:journl:halshs-00638149 is not listed on IDEAS
  6. David Neumark, 2009. "Alternative Labor Market Policies to Increase Economic Self-Sufficiency: Mandating Higher Wages, Subsidizing Employment, and Increasing Productivity," NBER Working Papers 14807, National Bureau of Economic Research, Inc.

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