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The Economic Effects of Living Wage Laws: A Provisional Review

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  • Scott Adams
  • David Neumark

Abstract

Nearly 100 cities and local governments in the United States have passed living wage laws since the mid-1990s. Although the central goal of living wages is to reduce poverty, 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. On balance, there are some beneficial distributional effects. The evidence also points to efficiency wage-type effects of living wage laws that may offset some of the adverse effects on employers.

Suggested Citation

  • Scott Adams & David Neumark, 2004. "The Economic Effects of Living Wage Laws: A Provisional Review," PPIC Working Papers 2004.10, Public Policy Institute of California.
    • Handle: RePEc:ppi:ppicwp:2004.10
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    Cited by:

    1. is not listed on IDEAS
    2. Mastracci, Sharon H. & Persky, Joseph J., 2008. "Effects of state minimum wage increases on employment, hours, and earnings of low-wage workers in Illinois," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 38(3), pages 1-11.
    3. Paul OSTERMAN, 2008. "Improving the quality of low-wage work: The current American experience," International Labour Review, International Labour Organization, vol. 147(2-3), pages 115-134, June.
    4. David Neumark, 2009. "Alternative Labor Market Policies to Increase Economic Self-Sufficiency: Mandating Higher Wages, Subsidizing Employment, and Increasing Productivity," NBER Working Papers 14807, National Bureau of Economic Research, Inc.
    5. James Buss & Arthur Romeo, 2006. "The changing employment situation in some cities with living wage ordinances," Review of Social Economy, Taylor & Francis Journals, vol. 64(3), pages 349-367.

    More about this item

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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