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Minimum Wages and Poverty

Author

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  • John T. Addison
  • McKinleyl Blackburn

Abstract

The principal justification for minimum wage legislation has been the claim that it would improve the economic condition of low-wage workers. Most previous analyses of the distributional effects of minimum wages have been based on simulation exercises employing restrictive assumptions that guarantee the conclusion that an increase in the minimum wage reduces poverty. In contrast, the authors of this paper adopt a more flexible “reduced-form†approach that links increases in both federal and state minima to contemporaneous changes in poverty rates. For the period 1983–96, they find indications of a poverty-reducing effect of minimum wages among teenagers and older junior high school dropouts.

Suggested Citation

  • John T. Addison & McKinleyl Blackburn, 1999. "Minimum Wages and Poverty," ILR Review, Cornell University, ILR School, vol. 52(3), pages 393-409, April.
    • Handle: RePEc:sae:ilrrev:v:52:y:1999:i:3:p:393-409
    DOI: 10.1177/001979399905200302
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    References listed on IDEAS

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    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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