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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 have passed living wage laws since the mid-1990s. Although the central goal of living wages is to reduce poverty, 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. On balance, there are some beneficial distributional effects. The evidence also points to efficiency wage-type effects of living wage laws that may offset some of the adverse effects on employers.

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Bibliographic Info

Paper provided by Public Policy Institute of California in its series PPIC Working Papers with number 2004.10.

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Length: 39 pages
Date of creation: Jun 2004
Date of revision:
Handle: RePEc:ppi:ppicwp:2004.10

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References

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  1. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 249-275, February.
  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 & 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.
  4. David Neumark & Scott Adams, 2003. "Do Living Wage Ordinances Reduce Urban Poverty?," Journal of Human Resources, University of Wisconsin Press, vol. 38(3).
  5. 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 qt8km9s5m7, Institute of Industrial Relations, UC Berkeley.
  6. Timothy J. Bartik, 2002. "Thinking about Local Living Wage Requirements," Upjohn Working Papers and Journal Articles 02-76, W.E. Upjohn Institute for Employment Research.
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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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