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Minimum Wages and Poverty

  • Addison, John T.
  • Blackburn, McKinley L.

The principal justification for minimum wage legislation resides in improving the economic condition of low-wage workers. Most previous analyses of the distributional effects of minimum wages have been confined to simulation exercises employing rather restrictive assumptions that guarantee the conclusion that an increase in the minimum wage reduces poverty. In contrast, we adopt a more flexible "reduced-form" approach that links increases in both federal and state minima to contemporaneous changes in poverty rates. For the period 1983-96, we find indication of a poverty-reducing effect of minimum wages among older junior-high dropouts and among teenagers.

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Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 98-42.

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Date of creation: 1998
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Handle: RePEc:zbw:zewdip:5213
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  1. Katz, L.F. & Krueger, A.B., 1992. "The Effect of the Minimum Wage on the Fast Food Industry," Harvard Institute of Economic Research Working Papers 1584, Harvard - Institute of Economic Research.
  2. Alison J. Wellington, 1991. "Effects of the Minimum Wage on the Employment Status of Youths: An Update," Journal of Human Resources, University of Wisconsin Press, vol. 26(1), pages 27-46.
  3. David Card, 1992. "Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage," NBER Working Papers 4058, National Bureau of Economic Research, Inc.
  4. David Neumark & William Wascher, 1992. "Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws," ILR Review, Cornell University, ILR School, vol. 46(1), pages 55-81, October.
  5. David Card & Alan Krueger, 1993. "Minimum Wages and Employment: A Case Study of the Fast Food Industry in New Jersey and Pennsylvania," Working Papers 694, Princeton University, Department of Economics, Industrial Relations Section..
  6. John T. Addison & McKinley L. Blackburn & Chad D. Cotti, 2012. "The Effect of Recent Increases in the U.S. Minimum Wage: Results from Three Data Sources," Working Paper Series 58_12, The Rimini Centre for Economic Analysis.
  7. Richard V. Burkhauser & T. Aldrich Finegan, 1989. "The minimum wage and the poor: The end of a relationship," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 8(1), pages 53-71.
  8. Blackburn, McKinley L., 1997. "Misspecified skedastic functions in grouped-data models," Economics Letters, Elsevier, vol. 55(1), pages 1-8, August.
  9. Brown, Charles & Gilroy, Curtis & Kohen, Andrew, 1982. "The Effect of the Minimum Wage on Employment and Unemployment," Journal of Economic Literature, American Economic Association, vol. 20(2), pages 487-528, June.
  10. Johnson, William R & Browning, Edgar K, 1983. "The Distributional and Efficiency Effects of Increasing the Minimum Wage: A Simulation," American Economic Review, American Economic Association, vol. 73(1), pages 204-11, March.
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