Living Wage Effects: New and Improved Evidence

No 9702, NBER Working Papers from National Bureau of Economic Research, Inc

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.

JEL-codes: I2 J2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-edu and nep-ltv
Date: Written 2003-05
Note: LS
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