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Living Wage Effects: New and Improved Evidence

  • Scott Adams
  • David Neumark

This paper explores the effects of living wages on low-wage workers and low-income families. First, we update our earlier analyses, using data for 1996-2002, and address a number of criticisms of those analyses. We confirm our earlier findings that business assistance living wage laws boost wages of the lowest-wage workers, at the cost of some disemployment, but on net reduce urban poverty. Second, we expand the analysis of distributional effects beyond looking just at the poverty threshold. We do not find that living wages increase the depth of poverty among families that remain poor, and we find that families somewhat below and somewhat above the poverty line are also helped by living wages. Finally, we suggest that the poverty reductions generated by living wages may stem from income gains for individuals with higher wages or skills who are nonetheless in poor families, rather than for the lowest-wage or lowest-skill individuals.

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File URL: http://www.nber.org/papers/w9702.pdf
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9702.

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Date of creation: May 2003
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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:9702
Note: LS
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  1. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
  2. David Neumark & William Wascher, 1997. "Do Minimum Wages Fight Poverty?," NBER Working Papers 6127, National Bureau of Economic Research, Inc.
  3. Golan, Amos & Perloff, Jeffrey M. & Wu, Ximing, 2001. "Welfare Effects of Minimum Wage and Other Government Policies," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt0gb7h58q, Department of Agricultural & Resource Economics, UC Berkeley.
  4. Roger Koenker & Kevin F. Hallock, 2001. "Quantile Regression," Journal of Economic Perspectives, American Economic Association, vol. 15(4), pages 143-156, Fall.
  5. David Neumark & Scott Adams, 2000. "Do Living Wage Ordinances Reduce Urban Poverty?," NBER Working Papers 7606, National Bureau of Economic Research, Inc.
  6. repec:sae:ilrrev:v:49:y:1996:i:3:p:547-552 is not listed on IDEAS
  7. David Neumark, 2004. "Living Wages: Protection for or Protection from Low-Wage Workers?," ILR Review, Cornell University, ILR School, vol. 58(1), pages 27-51, October.
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