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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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Handle: RePEc:nbr:nberwo:9702

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References

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  1. David Neumark & Scott Adams, 2003. "Do Living Wage Ordinances Reduce Urban Poverty?," Journal of Human Resources, University of Wisconsin Press, vol. 38(3).
  2. 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.
  3. Golan, Amos & Perloff, Jeffrey M. & Wu, Ximing, 2001. "Welfare Effects of Minimum Wage and Other Government Policies," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt0gb7h58q, Department of Agricultural & Resource Economics, UC Berkeley.
  4. 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.
  5. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, number 9780521608275, November.
  6. David Neumark & William Wascher, 1997. "Do Minimum Wages Fight Poverty?," NBER Working Papers 6127, 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. Holzer, Harry J., 2008. "Living Wage Laws: How Much Do (Can) They Matter?," IZA Discussion Papers 3781, Institute for the Study of Labor (IZA).
  2. Jellal, Mohamed, 2012. "Maroc salaire minimum emploi et pauvreté
    [Morocco minimum wage employment and poverty]
    ," MPRA Paper 38491, University Library of Munich, Germany.
  3. 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.
  4. Scott Adams & David Neumark, 2004. "When Do Living Wages Bite?," PPIC Working Papers 2004.09, Public Policy Institute of California.
  5. 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).
  6. 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.
  7. Adams, Scott & Neumark, David, 2005. "The Effects of Living Wage Laws: Evidence from Failed and Derailed Living Wage Campaigns," IZA Discussion Papers 1566, Institute for the Study of Labor (IZA).
  8. 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.
  9. Suzanne Clain, 2008. "How Living Wage Legislation Affects U.S. Poverty Rates," Journal of Labor Research, Springer, vol. 29(3), pages 205-218, September.
  10. 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).
  11. James Buss & Arthur Romeo, 2006. "The changing employment situation in some cities with living wage ordinances," Review of Social Economy, Taylor & Francis Journals, vol. 64(3), pages 349-367.

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