IDEAS home Printed from https://ideas.repec.org/p/aut/wpaper/201103.html
   My bibliography  Save this paper

Assessing the Possible Antipoverty Effects of Recent Rises in Age-Specific Minimum Wages in New Zealand

Author

Listed:
  • Tim Maloney

    (Department of Economics, Auckland University of Technology, Auckland, New Zealand.)

  • Gail Pacheco

    () (Department of Economics, Auckland University of Technology, Auckland, New Zealand.)

Abstract

Real minimum wages increased by nearly 33% for adults and 123% for teenagers in New Zealand between 1999 and 2008. Where fewer than 2% of workers were being paid a minimum wage at the outset of this sample period, now more than 8% of adult workers and 60% of teenage workers are receiving hourly earnings close to the minimum wage. These policy changes provide a unique opportunity to estimate the effects of the minimum wage on the characteristics of these workers and their location across the income distribution. We provide some evidence on the likely consequences of these rising minimum wages on the poverty rate in New Zealand. Although minimum wage workers are more likely to live in the poorest households, they are relatively widely dispersed throughout the income distribution. This is particularly true of teenage minimum wage workers. Furthermore, low-income households often do not contain any working members. We estimate that a 10% increase in minimum wages, even without any offsetting reduction in earnings due to a loss in employment or hours of work, would lower the relative poverty rate by less than one-tenth of a percentage point.

Suggested Citation

  • Tim Maloney & Gail Pacheco, 2011. "Assessing the Possible Antipoverty Effects of Recent Rises in Age-Specific Minimum Wages in New Zealand," Working Papers 2011-03, Auckland University of Technology, Department of Economics.
  • Handle: RePEc:aut:wpaper:201103
    as

    Download full text from publisher

    File URL: http://www.aut.ac.nz/__data/assets/pdf_file/0015/228012/Economics-WP-2011-03.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hyslop, Dean & Stillman, Steven, 2004. "Youth Minimum Wage Reform and the Labour Market," IZA Discussion Papers 1091, Institute for the Study of Labor (IZA).
    2. 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.
    3. Marta Pascual & David Cantarero & José Sarabia, 2005. "Income Inequality and Health: Do the Equivalence Scales Matter?," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 33(2), pages 169-178, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kai-Uwe Müller & Viktor Steiner, 2013. "Distributional Effects of a Minimum Wage in a Welfare State: The Case of Germany," SOEPpapers on Multidisciplinary Panel Data Research 617, DIW Berlin, The German Socio-Economic Panel (SOEP).
    2. Müller, Kai-Uwe & Steiner, Viktor, 2013. "Distributional effects of a minimum wage in a welfare state: The case of Germany," Discussion Papers 2013/21, Free University Berlin, School of Business & Economics.
    3. Sergey Kapelyuk, 2015. "The effect of minimum wage on poverty," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 23(2), pages 389-423, April.
    4. Omar Aziz & Norman Gemmell & Athene Laws, 2016. "Income and Fiscal Incidence by Age and Gender: Some Evidence from New Zealand," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 62(3), pages 534-558, September.
    5. Kapelyuk Sergey, 2014. "Impact of minimum wage on income distribution and poverty in Russia," EERC Working Paper Series 14/03e, EERC Research Network, Russia and CIS.

    More about this item

    Keywords

    New Zealand; Minimum Wage; Poverty;

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aut:wpaper:201103. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Gail Pacheco). General contact details of provider: http://edirc.repec.org/data/fbautnz.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.