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Does Raising the Minimum Wage Help the Poor?

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  • Andrew Leigh

Abstract

What is the impact of raising the minimum wage on family incomes? Analysing the characteristics of low wage workers, I find that those who earn near-minimum wages are disproportionately female, unmarried and young, without post-school qualifications and overseas born. About one-third of near-minimum wage workers are the sole worker in their household. Due to low labour force participation rates in the poorest households, minimum wage workers are most likely to be in middle-income households. Using various plausible parameters for the effect of minimum wages on hourly wages and employment, I estimate the impact of a minimum wage rise on inequality.

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Bibliographic Info

Paper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 501.

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Length: 22 pages
Date of creation: Nov 2005
Date of revision:
Handle: RePEc:auu:dpaper:501

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Keywords: Minimum wages; employment; wages; earnings; income distribution;

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Cited by:
  1. 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.
  2. Wang-Sheng Lee & Sandy Suardi, 2008. "Minimum Wages and Employment: Reconsidering the Use of a Time-Series Approach as an Evaluation Tool," Melbourne Institute Working Paper Series wp2008n20, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  3. Frijters, Paul & Gregory, Bob, 2006. "From Golden Age to Golden Age: Australia's "Great Leap Forward"?," IZA Discussion Papers 2068, Institute for the Study of Labor (IZA).
  4. Roger Wilkins & Mark Wooden, 2011. "Measuring Minimum Award Wage Reliance in Australia: The HILDA Survey Experience," Melbourne Institute Working Paper Series wp2011n11, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  5. Joseph J. Sabia, 2008. "Minimum wages and the economic well-being of single mothers," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 27(4), pages 848-866.
  6. Benassi, Chiara, 2011. "The implementation of minimum wage : challenges and creative solutions," ILO Working Papers 462988, International Labour Organization.

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