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Do Minimum Wages Fight Poverty?
Author(s) -
Neumark David,
Wascher William
Publication year - 2002
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1093/ei/40.3.315
Subject(s) - poverty , economics , minimum wage , redistribution (election) , labour economics , redistribution of income and wealth , demographic economics , net income , unemployment , economic growth , politics , political science , law , finance
We present evidence on the effects of minimum wages on family incomes. The results indicate that minimum wages increase both the probability that poor families escape poverty and the probability that previously nonpoor families fall into poverty. The estimated increase in the flow into poverty is larger, although this difference is not statistically significant. We also find that minimum wages tend to boost the incomes of poor families that remain below the poverty line. On net, the various trade‐offs created by minimum wage increases more closely resemble income redistribution among low‐income families than income redistribution from high‐ to low‐income families.