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Minimum wages and poverty

  • John T. Addison
  • McKinley L. Blackburn

The principal justification for minimum wage legislation has been the claim that it would improve the economic condition of low-wage workers. Most previous analyses of the distributional effects of minimum wages have been based on simulation exercises employing restrictive assumptions that guarantee the conclusion that an increase in the minimum wage reduces poverty. In contrast, the authors of this paper adopt a more flexible "reduced-form" approach that links increases in both federal and state minima to contemporaneous changes in poverty rates. For the period 1983-96, they find indications of a poverty-reducing effect of minimum wages among teenagers and older junior high school dropouts. (Abstract courtesy JSTOR.)

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Article provided by ILR Review, Cornell University, ILR School in its journal ILR Review.

Volume (Year): 52 (1999)
Issue (Month): 3 (April)
Pages: 393-409

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Handle: RePEc:ilr:articl:v:52:y:1999:i:3:p:393-409
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  1. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," NBER Working Papers 4058, National Bureau of Economic Research, Inc.
  2. Katz, L.F. & Krueger, A.B., 1992. "The Effect of the Minimum Wage on the Fast Food Industry," Harvard Institute of Economic Research Working Papers 1584, Harvard - Institute of Economic Research.
  3. Johnson, William R & Browning, Edgar K, 1983. "The Distributional and Efficiency Effects of Increasing the Minimum Wage: A Simulation," American Economic Review, American Economic Association, vol. 73(1), pages 204-11, March.
  4. Alison J. Wellington, 1991. "Effects of the Minimum Wage on the Employment Status of Youths: An Update," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 27-46.
  5. John T. Addison & McKinley L. Blackburn & Chad D. Cotti, 2012. "The Effect of Recent Increases in the U.S. Minimum Wage: Results from Three Data Sources," Working Paper Series 58_12, The Rimini Centre for Economic Analysis.
  6. Brown, Charles & Gilroy, Curtis & Kohen, Andrew, 1982. "The Effect of the Minimum Wage on Employment and Unemployment," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 487-528, June.
  7. Blackburn, McKinley L., 1997. "Misspecified skedastic functions in grouped-data models," Economics Letters, Elsevier, vol. 55(1), pages 1-8, August.
  8. David Card & Alan B. Krueger, 1993. "Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania," NBER Working Papers 4509, National Bureau of Economic Research, Inc.
  9. David Neumark & William Wascher, 1992. "Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws," ILR Review, Cornell University, ILR School, vol. 46(1), pages 55-81, October.
  10. Richard V. Burkhauser & T. Aldrich Finegan, 1989. "The minimum wage and the poor: The end of a relationship," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 8(1), pages 53-71.
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