Working Paper: NBER ID: w9702
Authors: Scott Adams; David Neumark
Abstract: 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.
Keywords: No keywords provided
JEL Codes: I2; J2; J3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| living wage laws (J38) | tradeoff between wage increases and employment opportunities (J39) |
| living wage laws (J38) | increase in wages for the lowest-wage workers (J38) |
| living wage laws (J38) | some disemployment (J63) |
| increase in wages for the lowest-wage workers (J38) | reduce urban poverty (R11) |
| living wage laws (J38) | reduce urban poverty (R11) |