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The Effects of Living Wage Laws: Evidence from Failed and Derailed Living Wage Campaigns

Author

Listed:
  • Adams, Scott

    () (University of Wisconsin, Milwaukee)

  • Neumark, David

    () (University of California, Irvine)

Abstract

Living wage campaigns have succeeded in about 100 jurisdictions in the United States but have also been unsuccessful in numerous cities. These unsuccessful campaigns provide a better control group or counterfactual for estimating the effects of living wage laws than the broader set of all cities without a law, and also permit the separate estimation of the effects of living wage laws and living wage campaigns. We find that living wage laws raise wages of low-wage workers but reduce employment among the least-skilled, especially when the laws cover business assistance recipients or are accompanied by similar laws in nearby cities.

Suggested Citation

  • Adams, Scott & Neumark, David, 2005. "The Effects of Living Wage Laws: Evidence from Failed and Derailed Living Wage Campaigns," IZA Discussion Papers 1566, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp1566
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    References listed on IDEAS

    as
    1. Scott Adams & David Neumark, 2005. "Living Wage Effects: New and Improved Evidence," Economic Development Quarterly, , vol. 19(1), pages 80-102, February.
    2. Scott Adams & David Neumark, 2004. "When Do Living Wages Bite?," PPIC Working Papers 2004.09, Public Policy Institute of California.
    3. Marianne P. Bitler & Jonah B. Gelbach & Hilary W. Hoynes, 2003. "Some Evidence on Race, Welfare Reform, and Household Income," American Economic Review, American Economic Association, vol. 93(2), pages 293-298, May.
    4. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-In-Differences Estimates?," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 249-275.
    5. John DiNardo & David S. Lee, 2002. "The Impact of Unionization on Establishment Closure: A Regression Discontinuity Analysis of Representation Elections," NBER Working Papers 8993, National Bureau of Economic Research, Inc.
    6. Smith, James P & Welch, Finis, 1984. "Affirmative Action and Labor Markets," Journal of Labor Economics, University of Chicago Press, vol. 2(2), pages 269-301, April.
    7. Gruber, Jonathan, 1994. "The Incidence of Mandated Maternity Benefits," American Economic Review, American Economic Association, vol. 84(3), pages 622-641, June.
    8. David Neumark & Scott Adams, 2003. "Do Living Wage Ordinances Reduce Urban Poverty?," Journal of Human Resources, University of Wisconsin Press, vol. 38(3).
    9. Burkhauser, Richard V & Couch, Kenneth A & Wittenburg, David C, 2000. "A Reassessment of the New Economics of the Minimum Wage Literature with Monthly Data from the Current Population Survey," Journal of Labor Economics, University of Chicago Press, vol. 18(4), pages 653-680, October.
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    Cited by:

    1. David Neumark & Matthew Thompson & Leslie Koyle, 2012. "The effects of living wage laws on low-wage workers and low-income families: What do we know now?," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 1(1), pages 1-34, December.
    2. Andrea Werner & Ming Lim, 2016. "The Ethics of the Living Wage: A Review and Research Agenda," Journal of Business Ethics, Springer, vol. 137(3), pages 433-447, September.
    3. Ravi Kanbur & Gary Fields, 2005. "Minimum Wages And Poverty," Working Papers id:169, eSocialSciences.
    4. Gary Fields & Ravi Kanbur, 2007. "Minimum wages and poverty with income-sharing," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 5(2), pages 135-147, August.
    5. Powers Elizabeth T & Powers Nicholas J, 2010. "Causes of Caregiver Turnover and the Potential Effectiveness of Wage Subsidies for Solving the Long-Term Care Workforce 'Crisis'," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 10(1), pages 1-30, January.
    6. Elizabeth Powers, 2009. "The Impact of Minimum-Wage Increases: Evidence from Fast-food Establishments in Illinois and Indiana," Journal of Labor Research, Springer, vol. 30(4), pages 365-394, December.
    7. Suzanne Clain, 2012. "Explaining the Passage of Living Wage Legislation in the U.S," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 40(3), pages 315-327, September.
    8. Lester, William T., 2009. "The Impact of Living Wage Laws on Urban Economic Development Patterns and the Local Business Climate: Evidence from California Cities," Institute for Research on Labor and Employment, Working Paper Series qt9313w788, Institute of Industrial Relations, UC Berkeley.

    More about this item

    Keywords

    wages; living wages; employment;

    JEL classification:

    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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