The Impact of Living Wage Laws on Urban Economic Development Patterns and the Local Business Climate: Evidence From California Cities
AbstractTraditional local economic development policies entice private businesses to create high-paying jobs in a given jurisdiction through direct subsidies or by projecting a positive “business climate” within regional and global arenas. Since 1994 however, living wage ordinances have emerged as an alternative response to labor market polarization in urban areas. However, these laws raise labor costs for employers and may thus reduce economic growth. This article advances the empirical literature on living wage impacts through the use of a novel data set—the National Establishment Time Series—to track employment and establishment growth at the city level among directly affected employers (e.g., government contractors), as well as other establishments that may be indirectly signaled by a change in the local political environment. Using panel regression models that account for structural differences between living wage and non-living wage cities, this article finds that living wage laws have no significant impact on employment or establishment growth. Additionally, this article finds no evidence that living wage laws “signal” businesses about a potentially harmful change in the local business climate.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by in its journal Economic Development Quarterly.
Volume (Year): 25 (2011)
Issue (Month): 3 (August)
Contact details of provider:
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Neumark, David & Thompson, Matthew & Koyle, Leslie, 2012. "The Effects of Living Wage Laws on Low-Wage Workers and Low-Income Families: What Do We Know Now?," IZA Discussion Papers 7114, Institute for the Study of Labor (IZA).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (SAGE Publications).
If references are entirely missing, you can add them using this form.