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The Effects of Minimum Wage Increases on Poverty and Food Hardship

Author

Listed:
  • Lehner, Lukas
  • Massenbauer, Hannah

    (University of Zurich)

  • Parolin, Zachary

    (The Institute for New Economic Thinking at the Oxford Martin School, University of Oxford)

  • Pintro Schmitt, Rafael

    (University of California, Berkeley)

Abstract

We study the effects of minimum wage (MW) increases on poverty and food hardship in the United States from 1981–2019 using stacked difference-in-differences models and the Supplemental Poverty Measure. A $1 MW increase reduces poverty by 0.3–0.7 percentage points among all working-age adults and 1.2–1.7 percentage points among likely MW workers, while also reducing food insufficiency by 1.5 percentage points for this group. Effects on poverty are partially offset by higher living costs in MW-increasing states. MW increases meaningfully reduce poverty and food hardship for the workers most directly affected but deliver modest improvements for the broader working-age population.

Suggested Citation

  • Lehner, Lukas & Massenbauer, Hannah & Parolin, Zachary & Pintro Schmitt, Rafael, 2025. "The Effects of Minimum Wage Increases on Poverty and Food Hardship," INET Oxford Working Papers 2025-23, Institute for New Economic Thinking at the Oxford Martin School, University of Oxford.
    • Handle: RePEc:amz:wpaper:2025-23
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    Keywords

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    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy

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