Measuring the Impact of Living Wage Laws: A Critical Appraisal of David Neumark's How Living Wage Laws Affect Low-Wage Workers and Low-Income Families

Robert Pollin, Jeannette Wicks-Lim and Mark D. Brenner

Working Papers from Political Economy Research Institute, University of Massachusetts at Amherst

Abstract: Drawing on data from the Current Population Survey (CPS), David Neumark (2002) finds that living wage laws have brought substantial wage increases for a high proportion of workers in cities that have passed these laws. He also finds that living wage laws significantly reduce employment opportunities for low-wage workers. We argue, first, that by truncating his sample to concentrate his analysis on low-wage workers, Neumark’s analysis is vulnerable to sample selection bias, and that his results are not robust to alternative specifications that utilize quantile regression to avoid such selection bias. In addition, we argue that Neumark has erroneously utilized the CPS data set to derive these results. We show that, with respect to both wage and employment effects, Neumark’s results are not robust to more accurate alternative classifications as to which workers are covered by living wage laws. We also show that the wage effects that Neumark observes for all U.S. cities with living wage laws can be more accurately explained as resulting from effects on sub-minimum wage workers in Los Angeles alone of a falling unemployment rate and rising minimum wage in that city.

Date: 2002
New Economics Papers: this item is included in nep-lab and nep-pke
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
https://per.umass.edu/fileadmin/pdf/working_papers/working_papers_1-50/WP43.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 500 Can't connect to per.umass.edu:443 (No such host is known. )

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:uma:periwp:wp43

Access Statistics for this paper

More papers in Working Papers from Political Economy Research Institute, University of Massachusetts at Amherst Contact information at EDIRC.
Bibliographic data for series maintained by Judy Fogg ( this e-mail address is bad, please contact ).