The Effects of Minimum Wages on the Distribution of Family Incomes: A Non-Parametric Analysis

David Neumark, Mark Schweitzer and William Wascher

No 6536, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The primary goal of a national minimum wage floor is to raise the incomes of poor or near-poor families with members in the work force. However, estimates of employment effects of minimum wages tell us relatively little about whether minimum wages are likely to achieve this goal; even if the disemployment effects of minimum wages are modest, minimum wage increases could result in net income losses for poor and low-income families. In this paper, we present evidence on the effects of minimum wages on family incomes from matched March CPS surveys. Using non-parametric estimates of the distributions of family income relative to needs in states and years with an without minimum wage increases, we examine the effects of minimum wages on this distribution, and on the distribution of the changes in income that families experience. Although minimum wages do increase the incomes of some poor families, the evidence indicates that the overall effects are to increase the proportion of families that are poor and near-poor, and to decrease the proportion of families with incomes between 1.5 and 3 times the poverty level.

JEL-codes: I3 J18 (search for similar items in EconPapers)
Date: 1998-04
New Economics Papers: this item is included in nep-pbe
Note: LS
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Citations: View citations in EconPapers (25)

Published as Journal of Human Resources, Vol. 40, no. 4 (Autumn 2005): 867-894

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Related works:
Journal Article: The Effects of Minimum Wages on the Distribution of Family Incomes: A Nonparametric Analysis (2005)
Working Paper: The effects of minimum wages on the distribution of family incomes: a nonparametric analysis (2004)
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