Minimum Wages and Poverty

Posted: 17 Mar 1999

See all articles by John T. Addison

John T. Addison

University of South Carolina - Moore School of Business - Department of Economics; IZA Institute of Labor Economics

McKinley L. Blackburn

University of South Carolina - Darla Moore School of Business

Abstract

The principal justification for minimum wage legislation has been the claim that it would improve the economic condition of low-wage workers. Most previous analyses of the distributional effects of minimum wages have been based on simulation exercises employing restrictive assumptions that guarantee the conclusion that an increase in the minimum wage reduces poverty. In contrast, the authors of this paper adopt a more flexible "reduced-form" approach that links increases in both federal and state minima to contemporaneous changes in poverty rates. For the period 1983-96, they find indications of a poverty-reducing effect of minimum wages among teenagers and older junior high school dropouts.

JEL Classification: J31, J38

Suggested Citation

Addison, John T. and Blackburn, McKinley L., Minimum Wages and Poverty. Industrial & Labor Relations Review, April 1999. Available at SSRN: https://ssrn.com/abstract=146837

John T. Addison

University of South Carolina - Moore School of Business - Department of Economics ( email )

The Francis M. Hipp Building
1705 College Street
Columbia, SC 29208
United States
803-777-7400 (Phone)
803-777-6876 (Fax)

HOME PAGE: http://mooreschool.sc.edu/moore/economics/profiles/addison.htm

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

McKinley L. Blackburn (Contact Author)

University of South Carolina - Darla Moore School of Business ( email )

1705 College St
Francis M. Hipp Building
Columbia, SC 29208
United States
803-777-4931 (Phone)
803-777-6876 (Fax)

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