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Minimum Wages and Poverty

Author

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

Abstract

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.

Suggested Citation

  • Addison, John T. & Blackburn, McKinley L., 1998. "Minimum Wages and Poverty," ZEW Discussion Papers 98-42, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:5213
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    References listed on IDEAS

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    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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