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Do Living Wage Ordinances Reduce Urban Poverty?

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  • David Neumark
  • Scott Adams

Abstract

Living wage ordinances typically mandate that businesses under contract with a city or, in some cases, receiving assistance from a city, must pay their workers a wage sufficient to support a family financially. We estimate the effects of these ordinances on wages, hours, and employment in cities that have adopted such legislation. We then examine the effects of these laws on poverty. Our findings indicate that living wage ordinances boost wages of low-wage workers. Moreover, we find a moderate negative employment effect. Finally, some of the evidence suggests that living wages achieve modest reductions in urban poverty.

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Bibliographic Info

Article provided by University of Wisconsin Press in its journal Journal of Human Resources.

Volume (Year): 38 (2003)
Issue (Month): 3 ()
Pages:

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Handle: RePEc:uwp:jhriss:v:38:y:2003:i:3:p490-521

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Web page: http://jhr.uwpress.org/

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References

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  1. Charles Brown & Curtis Gilroy & Andrew Kohen, 1983. "Time-Series Evidence of the Effect of the Minimum Wage on Youth Employment and Unemployment," Journal of Human Resources, University of Wisconsin Press, vol. 18(1), pages 3-31.
  2. David Neumark & Mark Schweitzer & William Wascher, 2005. "The Effects of Minimum Wages on the Distribution of Family Incomes: A Nonparametric Analysis," Journal of Human Resources, University of Wisconsin Press, vol. 40(4), pages 867-894.
  3. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-93, September.
  4. Mincer, Jacob, 1976. "Unemployment Effects of Minimum Wages," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages S87-104, August.
  5. Edward M. Gramlich, 1976. "Impact of Minimum Wages on Other Wages, Employment, and Family Incomes," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 7(2), pages 409-462.
  6. David Neumark & William Wascher, 2002. "Do Minimum Wages Fight Poverty?," Economic Inquiry, Western Economic Association International, vol. 40(3), pages 315-333, July.
  7. Ashenfelter, Orley & Smith, Robert S, 1979. "Compliance with the Minimum Wage Law," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 333-50, April.
  8. Brown, Charles & Gilroy, Curtis & Kohen, Andrew, 1982. "The Effect of the Minimum Wage on Employment and Unemployment," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 487-528, June.
  9. David Neumark & William L. Wascher, 2008. "Minimum Wages," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262141027, December.
  10. David Neumark & DMark Schweitzer & DaWilliam Wascher, 2004. "Minimum Wage Effects throughout the Wage Distribution," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
  11. Jean Baldwin Grossman, 1983. "The Impact of the Minimum Wage on Other Wages," Journal of Human Resources, University of Wisconsin Press, vol. 18(3), pages 359-378.
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Citations

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Cited by:
  1. Scott Adams & David Neumark, 2004. "When Do Living Wages Bite?," NBER Working Papers 10561, National Bureau of Economic Research, Inc.
  2. Adams, Scott & Neumark, David, 2005. "The effects of living wage laws: Evidence from failed and derailed living wage campaigns," Journal of Urban Economics, Elsevier, vol. 58(2), pages 177-202, September.
  3. Ahn, Tom, 2011. "Distributional impacts of a local living wage increase with ability sorting," Economics Letters, Elsevier, vol. 112(3), pages 283-286, September.
  4. Scott Adams & David Neumark, 2003. "Living Wage Effects: New and Improved Evidence," NBER Working Papers 9702, National Bureau of Economic Research, Inc.
  5. Scott Adams & David Neumark, 2004. "The Economic Effects of Living Wage Laws: A Provisional Review," PPIC Working Papers 2004.10, Public Policy Institute of California.
  6. Neumark, David & Thompson, Matthew & Brindisi, Francesco & Koyle, Leslie & Reck, Clayton, 2012. "Simulating the Economic Impacts of Living Wage Mandates Using New Public and Administrative Data: Evidence for New York City," IZA Discussion Papers 7113, Institute for the Study of Labor (IZA).
  7. David Neumark & Daiji Kawaguchi, 2001. "Attrition Bias in Economic Relationships Estimated with Matched CPS Files," NBER Working Papers 8663, National Bureau of Economic Research, Inc.
  8. 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).
  9. Daniel Fairchild, 2004. "Does the minimum wage help the poor?," Forum for Social Economics, Springer, vol. 34(1), pages 31-42, September.
  10. David Neumark, 2001. "Living Wages: Protection For or Protection From Low-Wage Workers?," NBER Working Papers 8393, National Bureau of Economic Research, Inc.
  11. Mark D. Brenner, 2004. "The Economic Impact of Living Wage Ordinances," Working Papers wp80, Political Economy Research Institute, University of Massachusetts at Amherst.
  12. Biglan, Anthony & Cody, Christine, 2013. "Integrating the human sciences to evolve effective policies," Journal of Economic Behavior & Organization, Elsevier, vol. 90(S), pages S152-S162.

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