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Minimum Wages and the Distribution of Family Incomes
| Content Provider | Semantic Scholar |
|---|---|
| Author | Dube, Arindrajit |
| Copyright Year | 2013 |
| Abstract | I use data from the March Current Population Survey between 1990 and 2012 to evaluate the e ect of minimum wages on the distribution of family incomes for non-elderly individuals. I find robust evidence that higher minimum wages moderately reduce the share of individuals with incomes below 50, 75 and 100 percent of the federal poverty line. The elasticity of the poverty rate with respect to the minimum wage ranges between -0.12 and -0.37 across specifications with alternative forms of time-varying controls and lagged e ects; most of these estimates are statistically significant at conventional levels. For my preferred (most saturated) specification, the poverty rate elasticity is -0.24, and rises in magnitude to -0.36 when accounting for lags. I also use recentered influence function regressions to estimate unconditional quantile partial e ects of minimum wages on family incomes. The estimated minimum wage elasticities are sizable for the bottom quantiles of the equivalized family income distribution. The clearest e ects are found at the 10th and 15th quantiles, where estimates from most specifications are statistically significant; minimum wage elasticities for these two family income quantiles range between 0.10 and 0.43 depending on control sets and lags. I also show that the canonical two-way fixed e ects model—used most often in the literature—insu ciently accounts for the spatial heterogeneity in minimum wage policies, and fails a number of key falsification tests. Accounting for time-varying regional e ects, and state-specific recession e ects both suggest a greater impact of the policy on family incomes and poverty, while the addition of state-specific trends does not appear to substantially alter the estimates. I also provide a quantitative summary of the literature, bringing together nearly all existing elasticities of the poverty rate with respect to minimum wages from 12 di erent papers. The range of the estimates in this paper is broadly consistent with most existing evidence, including for some key subgroups, but previous studies often su er from limitations including insu ciently long sample periods and inadequate controls for state-level heterogeneity, which tend to produce imprecise and erratic results. úUniversity of Massachusetts Amherst, and IZA. Email: adube@econs.umass.edu. I thank Thomas Peake, Owen Thompson and especially Ben Zipperer for excellent research assistance. This research was funded in part through grants from University of Massachusetts Amherst, and University of Wisconsin-Madison Institute for Research on Poverty. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://cdn.equitablegrowth.org/wp-content/uploads/2017/04/24114945/042517-dube-minwage.pdf |
| Alternate Webpage(s) | http://facweb.northseattle.edu/dperry/econ201/Min%20Wage/Dube_MinimumWagesFamilyIncomes(1).pdf |
| Language | English |
| Access Restriction | Open |
| Subject Keyword | Disease regression Ectomesenchymal Chondromyxoid Tumor Elasticity (data store) Email Estimated Income Moderate Response Paper Recession cone Specification funding grant |
| Content Type | Text |
| Resource Type | Article |
