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Does the minimum wage affect welfare caseloads?
Author(s) -
Page Marianne E.,
Spetz Joanne,
Millar Jane
Publication year - 2005
Publication title -
journal of policy analysis and management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.898
H-Index - 84
eISSN - 1520-6688
pISSN - 0276-8739
DOI - 10.1002/pam.20090
Subject(s) - minimum wage , welfare , economics , legislation , labour economics , wage , sample (material) , demographic economics , political science , market economy , chemistry , chromatography , law
Although minimum wages are advocated as a policy that will help the poor, few studies have examined their effect on poor families. This paper uses variation in minimum wages across states and over time to estimate the impact of minimum wage legislation on welfare caseloads. We find that the elasticity of the welfare caseload with respect to the minimum wage is between 0.1 and 0.2, but this estimate is sensitive to the sample period and assumptions about state trends. We tentatively conclude that higher minimum wages increase welfare dependence; however, more research is warranted.© 2005 by the Association for Public Policy Analysis and Management