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Does Raising the Minimum Wage Help the Poor?

  • Andrew Leigh

What is the impact of raising the minimum wage on family incomes? Analysing the characteristics of low wage workers, I find that those who earn near-minimum wages are disproportionately female, unmarried and young, without post-school qualifications and overseas born. About one-third of near-minimum wage workers are the sole worker in their household. Due to low labour force participation rates in the poorest households, minimum wage workers are most likely to be in middle-income households. Using various plausible parameters for the effect of minimum wages on hourly wages and employment, I estimate the impact of a minimum wage rise on inequality.

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File URL: http://cbe.anu.edu.au/researchpapers/cepr/DP501.pdf
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Paper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 501.

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Length: 22 pages
Date of creation: Nov 2005
Date of revision:
Handle: RePEc:auu:dpaper:501
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