Living Wage Effects: New and Improved Evidence

46 Pages Posted: 19 May 2003 Last revised: 7 Jul 2022

See all articles by Scott J. Adams

Scott J. Adams

University of Wisconsin - Milwaukee - Department of Economics

David Neumark

University of California, Irvine - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

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Date Written: May 2003

Abstract

This paper explores the effects of living wages on low-wage workers and low-income families. First, we update our earlier analyses, using data for 1996-2002, and address a number of criticisms of those analyses. We confirm our earlier findings that business assistance living wage laws boost wages of the lowest-wage workers, at the cost of some disemployment, but on net reduce urban poverty. Second, we expand the analysis of distributional effects beyond looking just at the poverty threshold. We do not find that living wages increase the depth of poverty among families that remain poor, and we find that families somewhat below and somewhat above the poverty line are also helped by living wages. Finally, we suggest that the poverty reductions generated by living wages may stem from income gains for individuals with higher wages or skills who are nonetheless in poor families, rather than for the lowest-wage or lowest-skill individuals.

Suggested Citation

Adams, Scott J. and Neumark, David, Living Wage Effects: New and Improved Evidence (May 2003). NBER Working Paper No. w9702, Available at SSRN: https://ssrn.com/abstract=408198

Scott J. Adams

University of Wisconsin - Milwaukee - Department of Economics ( email )

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David Neumark (Contact Author)

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