The Effects of Minimum Wages on the Distribution of Family Incomes: A Non-Parametric Analysis
AbstractThe primary goal of a national minimum wage floor is to raise the incomes of poor or near-poor families with members in the work force. However, estimates of employment effects of minimum wages tell us relatively little about whether minimum wages are likely to achieve this goal; even if the disemployment effects of minimum wages are modest, minimum wage increases could result in net income losses for poor and low-income families. In this paper, we present evidence on the effects of minimum wages on family incomes from matched March CPS surveys. Using non-parametric estimates of the distributions of family income relative to needs in states and years with an without minimum wage increases, we examine the effects of minimum wages on this distribution, and on the distribution of the changes in income that families experience. Although minimum wages do increase the incomes of some poor families, the evidence indicates that the overall effects are to increase the proportion of families that are poor and near-poor, and to decrease the proportion of families with incomes between 1.5 and 3 times the poverty level.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 6536.
Date of creation: Apr 1998
Date of revision:
Publication status: published as Journal of Human Resources, Vol. 40, no. 4 (Autumn 2005): 867-894
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Other versions of this item:
- 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.
- 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.
- J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
- I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Raising the Minimum Wage: A Tired, Bad Proposal
by Veronique de Rugy in The Corner on 2013-02-13 21:01:00
- Wonkblog: Economists agree: Raising the minimum wage reduces poverty
by Mike Konczal in Ezra Klein's Wonkblog on 2014-01-04 14:00:43
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