Minimum Wages and the Distribution of Family Incomes

77 Pages Posted: 12 Nov 2018 Last revised: 20 Jun 2021

See all articles by Arindrajit Dube

Arindrajit Dube

University of Massachusetts Amherst

Date Written: November 2018

Abstract

There is robust evidence that higher minimum wages increase family incomes at the bottom of the distribution. The long run (3 or more years) minimum wage elasticity of the non-elderly poverty rate with respect to the minimum wage ranges between -0.220 and -0.459 across alternative specifications. The long run minimum wage elasticities for the 10th and 15th unconditional quantiles of family income range between 0.152 and 0.430 depending on specification. A reduction in public assistance partly offsets these income gains, which are on average 66% as large when using an expanded income definition including tax credits and non-cash transfers.

Suggested Citation

Dube, Arindrajit, Minimum Wages and the Distribution of Family Incomes (November 2018). NBER Working Paper No. w25240, Available at SSRN: https://ssrn.com/abstract=3282904

Arindrajit Dube (Contact Author)

University of Massachusetts Amherst ( email )

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