The local aggregate effects of minimum wage increases

Daniel Cooper, Maria Luengo-Prado and Jonathan Parker

No 17-8, Working Papers from Federal Reserve Bank of Boston

Abstract: This paper examines the effect of minimum wage changes on local aggregate inflation and consumption growth. The paper utilizes variation in state-level minimum wages across locations and finds that minimum wage increases have a relatively modest effect on both city-level inflation and spending growth over the years following the change. The most noticeable effects are for food consumed at home and away from home?industries that typically employ a large share of low-wage and minimum-wage workers. Interestingly, consumers adjust their real food consumption when minimum wages rise, suggesting that some workers benefit from minimum wage changes.

Keywords: minimum wage increases; prices; consumption; local aggregate effects (search for similar items in EconPapers)
JEL-codes: E21 E31 E64 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2017-08-01
New Economics Papers: this item is included in nep-mac and nep-ure
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: The Local Aggregate Effects of Minimum Wage Increases (2019)
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