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The Economic Effects of Living Wage Laws: A Provisional Review

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  • Scott Adams
  • David Neumark

Abstract

Nearly 100 cities and local governments in the United States passed living wage laws since the mid-1990s. The central goal of living wages is to reduce poverty, yet they may fail to do so because of disemployment effects. We summarize and critique the existing research on the effects of living wages on wages, employment, and family income, emphasizing common findings, points of disagreement, and important questions for future research. The evidence thus far points to wage increases as well as employment losses for the least-skilled although there is disagreement about the employment effects but on net some beneficial distributional effects. The evidence also points to efficiency wage-type effects of living wage laws that may offset some of the adverse impacts on employers.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10562.

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Date of creation: Jun 2004
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Publication status: published as Adams, Scott and David Neumark. "Living Wage Effects: New And Improved Evidence," Economic Development Quarterly, 2005, v19(1,Feb), , 80-102.
Handle: RePEc:nbr:nberwo:10562

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  1. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
  2. David Neumark & Mark Schweitzer & William Wascher, 2004. "The effects of minimum wages on the distribution of family incomes: a nonparametric analysis," Working Paper, Federal Reserve Bank of Cleveland 0412, Federal Reserve Bank of Cleveland.
  3. Timothy J. Bartik, 2002. "Thinking about Local Living Wage Requirements," Upjohn Working Papers and Journal Articles, W.E. Upjohn Institute for Employment Research 02-76, W.E. Upjohn Institute for Employment Research.
  4. Reich, Michael & Hall, Peter & Jacobs, Ken, 2003. "Living Wage Policies at San Francisco Airport:: Impacts on Workers and Businesses," Institute for Research on Labor and Employment, Working Paper Series, Institute of Industrial Relations, UC Berkeley qt8km9s5m7, Institute of Industrial Relations, UC Berkeley.
  5. David Neumark, 2004. "Living wages: Protection for or protection from low-wage workers?," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 58(1), pages 27-51, October.
  6. David Neumark & Scott Adams, 2003. "Do Living Wage Ordinances Reduce Urban Poverty?," Journal of Human Resources, University of Wisconsin Press, vol. 38(3).
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Cited by:
  1. David Neumark, 2009. "Alternative Labor Market Policies to Increase Economic Self-Sufficiency: Mandating Higher Wages, Subsidizing Employment, and Increasing Productivity," NBER Working Papers 14807, National Bureau of Economic Research, Inc.
  2. 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).
  3. Holzer, Harry J., 2008. "Living Wage Laws: How Much Do (Can) They Matter?," IZA Discussion Papers 3781, Institute for the Study of Labor (IZA).

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