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The Economic Effects of Living Wage Laws: A Provisional Review

  • Scott Adams
  • David Neumark

Nearly 100 cities and local governments in the United States passed living wage laws since the mid-1990s. The central goal of living wages is to reduce poverty, yet they may fail to do so because of disemployment effects. We summarize and critique the existing research on the effects of living wages on wages, employment, and family income, emphasizing common findings, points of disagreement, and important questions for future research. The evidence thus far points to wage increases as well as employment losses for the least-skilled although there is disagreement about the employment effects but on net some beneficial distributional effects. The evidence also points to efficiency wage-type effects of living wage laws that may offset some of the adverse impacts on employers.

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File URL: http://www.nber.org/papers/w10562.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10562.

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Date of creation: Jun 2004
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Publication status: published as Adams, Scott and David Neumark. "Living Wage Effects: New And Improved Evidence," Economic Development Quarterly, 2005, v19(1,Feb), , 80-102.
Handle: RePEc:nbr:nberwo:10562
Note: LS
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  1. David Neumark & Scott Adams, 2000. "Do Living Wage Ordinances Reduce Urban Poverty?," NBER Working Papers 7606, National Bureau of Economic Research, Inc.
  2. David Neumark, 2001. "Living Wages: Protection For or Protection From Low-Wage Workers?," NBER Working Papers 8393, National Bureau of Economic Research, Inc.
  3. David Neumark & Mark Schweitzer & William Wascher, 2004. "The effects of minimum wages on the distribution of family incomes: a nonparametric analysis," Working Paper 0412, Federal Reserve Bank of Cleveland.
  4. Reich, Michael & Hall, Peter & Jacobs, Ken, 2003. "Living Wage Policies at San Francisco Airport:: Impacts on Workers and Businesses," Institute for Research on Labor and Employment, Working Paper Series qt8km9s5m7, Institute of Industrial Relations, UC Berkeley.
  5. Timothy J. Bartik, 2002. "Thinking about Local Living Wage Requirements," Upjohn Working Papers and Journal Articles 02-76, W.E. Upjohn Institute for Employment Research.
  6. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2004. "How Much Should We Trust Differences-in-Differences Estimates?," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 249-275, February.
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