Assessing the Possible Antipoverty Effects of Recent Rises in Age-Specific Minimum Wages in New Zealand
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.
|Date of creation:||Sep 2011|
|Date of revision:|
|Contact details of provider:|| Postal: Commerce House, 360 Queen Street, Private Bag 92006, Auckland 1020|
Phone: +64 9 917-9721
Fax: +64 9 917-9976
Web page: http://www.aut.ac.nz/business/working-paper-series
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- 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.
- Dean Hyslop & Steven Stillman, 2004.
"Youth Minimum Wage Reform and the Labour Market,"
Treasury Working Paper Series
04/03, New Zealand Treasury.
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)
If references are entirely missing, you can add them using this form.