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The Effects of Living Wage Laws on Low-Wage Workers and Low-Income Families: What Do We Know Now?

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Author Info

  • Neumark, David

    ()
    (University of California, Irvine)

  • Thompson, Matthew

    ()
    (Charles River Associates)

  • Koyle, Leslie

    ()
    (Charles River Associates)

Abstract

We provide updated evidence on the effects of living wage laws in U.S. cities, relative to the earlier research covering only the first six or seven years of existence of these laws. There are some challenges to updating the evidence, as the CPS data on which it relies changed geographic coding systems in the mid-2000s. The updated evidence is broadly consistent with the conclusions reached by prior research, including Holzer's (2008) review of that earlier evidence. Living wage laws reduce employment among the least-skilled workers they are intended to help. But they also increase wages for many of them. This implies that living wage laws generate both winners and losers among those affected by them. For broader living wage laws that cover recipients of business or financial assistance from cities, the net effects point to modest reductions in urban poverty.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7114.

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Length: 43 pages
Date of creation: Dec 2012
Date of revision:
Publication status: published in: IZA Journal of Labor Policy, 2012, 1:11
Handle: RePEc:iza:izadps:dp7114

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Keywords: poverty; employment; wages; living wage;

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  1. David Fairris & Leon Fernandez Bujanda, 2008. "The Dissipation of Minimum Wage Gains for Workers through Labor-Labor Substitution: Evidence from the Los Angeles Living Wage Ordinance," Southern Economic Journal, Southern Economic Association, vol. 75(2), pages 473-496, October.
  2. Neumark, David & Salas, J.M. Ian & Wascher, William, 2013. "Revisiting the Minimum Wage-Employment Debate: Throwing Out the Baby with the Bathwater?," IZA Discussion Papers 7166, Institute for the Study of Labor (IZA).
  3. David Neumark & Scott Adams, 2000. "Do Living Wage Ordinances Reduce Urban Poverty?," NBER Working Papers 7606, National Bureau of Economic Research, Inc.
  4. 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.
  5. David Neumark & Mark Schweitzer & William Wascher, 2004. "The effects of minimum wages on the distribution of family incomes: a nonparametric analysis," Working Paper 0412, Federal Reserve Bank of Cleveland.
  6. 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.
  7. Richard V. Burkhauser & Kenneth A. Couch & David C. Wittenburg, 1996. "Who gets what from minimum wage hikes: A re-estimation of Card and Krueger's distributional analysis in "Myth and Measurement: The New Economics of the Minimum Wage."," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 49(3), pages 547-552, April.
  8. Scott Adams & David Neumark, 2003. "Living Wage Effects: New and Improved Evidence," NBER Working Papers 9702, National Bureau of Economic Research, Inc.
  9. Scott Adams & David Neumark, 2005. "Living Wage Effects: New and Improved Evidence," Economic Development Quarterly, , vol. 19(1), pages 80-102, February.
  10. T. William Lester, 2011. "The Impact of Living Wage Laws on Urban Economic Development Patterns and the Local Business Climate: Evidence From California Cities," Economic Development Quarterly, , vol. 25(3), pages 237-254, August.
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