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Living Wage Effects: New and Improved Evidence

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  • Scott Adams
  • David Neumark

Abstract

This paper explores the effects of living wages on low-wage workers and low-income families. First, we update our earlier analyses, using data for 1996-2002, and address a number of criticisms of those analyses. We confirm our earlier findings that business assistance living wage laws boost wages of the lowest-wage workers, at the cost of some disemployment, but on net reduce urban poverty. Second, we expand the analysis of distributional effects beyond looking just at the poverty threshold. We do not find that living wages increase the depth of poverty among families that remain poor, and we find that families somewhat below and somewhat above the poverty line are also helped by living wages. Finally, we suggest that the poverty reductions generated by living wages may stem from income gains for individuals with higher wages or skills who are nonetheless in poor families, rather than for the lowest-wage or lowest-skill individuals.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9702.

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Date of creation: May 2003
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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:9702

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  1. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521608275.
  2. David Neumark, 2001. "Living Wages: Protection For or Protection From Low-Wage Workers?," NBER Working Papers 8393, National Bureau of Economic Research, Inc.
  3. David Neumark & William Wascher, 2002. "Do Minimum Wages Fight Poverty?," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 40(3), pages 315-333, July.
  4. Golan, Amos & Perloff, Jeffrey M. & Wu, Ximing, 2001. "Welfare effects of minimum wage and other government policies," CUDARE Working Paper Series, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy 957, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  5. 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.
  6. David Neumark & Scott Adams, 2000. "Do Living Wage Ordinances Reduce Urban Poverty?," NBER Working Papers 7606, National Bureau of Economic Research, Inc.
  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.
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Cited by:
  1. Scott Adams & David Neumark, 2005. "The Effects of Living Wage Laws: Evidence from Failed and Derailed Living Wage Campaigns," NBER Working Papers 11342, 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).
  4. Wang, Xianghong, 2012. "When workers do not know – The behavioral effects of minimum wage laws revisited," Journal of Economic Psychology, Elsevier, Elsevier, vol. 33(5), pages 951-962.
  5. James Buss & Arthur Romeo, 2006. "The changing employment situation in some cities with living wage ordinances," Review of Social Economy, Taylor & Francis Journals, Taylor & Francis Journals, vol. 64(3), pages 349-367.
  6. Ahn, Tom, 2011. "Distributional impacts of a local living wage increase with ability sorting," Economics Letters, Elsevier, Elsevier, vol. 112(3), pages 283-286, September.
  7. 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.
  8. Scott Adams & David Neumark, 2004. "When Do Living Wages Bite?," PPIC Working Papers, Public Policy Institute of California 2004.09, Public Policy Institute of California.
  9. Iulia Siedschlag, 2008. "Macroeconomic Differentials and Adjustment in the Euro Area," SUERF Studies, SUERF - The European Money and Finance Forum, SUERF - The European Money and Finance Forum, number 2008/3 edited by Morten Balling, July.
  10. Barrett, Alan & Bergin, Adele & FitzGerald, John & Traistaru-Siedschlag, Iulia, 2006. "Economic Assessment of the Euro Area: Forecasts and Policy Analysis, Autumn Report 2006," Research Series, Economic and Social Research Institute (ESRI), Economic and Social Research Institute (ESRI), number sustat22.
  11. Jared Bernstein, 2004. "The Living Wage Movement. What Is It, Why Is It, and What’s Known about Its Impact?," NBER Chapters, in: Emerging Labor Market Institutions for the Twenty-First Century, pages 99-140 National Bureau of Economic Research, Inc.
  12. 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).
  13. Jellal, Mohamed, 2012. "Maroc salaire minimum emploi et pauvreté
    [Morocco minimum wage employment and poverty]
    ," MPRA Paper 38491, University Library of Munich, Germany.
  14. David Neumark & William Wascher, 2006. "Minimum Wages and Employment: A Review of Evidence from the New Minimum Wage Research," NBER Working Papers 12663, National Bureau of Economic Research, Inc.
  15. Suzanne Clain, 2008. "How Living Wage Legislation Affects U.S. Poverty Rates," Journal of Labor Research, Springer, Springer, vol. 29(3), pages 205-218, September.

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