“Who Gets What” from Minimum Wage Hikes: A Re-Estimation of Card and Krueger's Distributional Analysis in Myth and Measurement: The New Economics of the Minimum Wage

Abstract

I've studied the arguments and the evidence for and against a minimum wage increase. I believe that the weight of the evidence is that a modest increase does not cost jobs, and may even lure people into the job market. But the most important thing is, you can't make a living on $4.25 an hour. President Clinton, State of the Union Address, 1995

The Effects of Minimum Wage Increases on Retail Employment and Hours: New Evidence from Monthly CPS Data

“…Several studies suggest that modern-day minimum wage hikes are no longer an effective means of reducing poverty among the working poor (see, for example, Burkhauser and Sabia 2007;Neumark andWascher 2001, 2002;Sabia 2008;Burkhauser et al 1996b). Studies by the Congressional Budget Office (CBO 2007) and Burkhauser et al (1996a) show that the Earned Income Tax Credit (EITC) may be a more target efficient policy tool to reduce poverty among poor families, while at the same time avoiding the adverse employment effects of minimum wage hikes.…”

The effects of the minimum wage in Brazil on the distribution of family incomes: 1996–2001

“…Generally speaking, though, neither type of study suggests that minimum wages are very effective in helping poor or low-income families, and in the before-and-after studies minimum wages if anything appear to increase poverty in the United States. This literature is quite unanimous in concluding that the reason minimum wage increases do not deliver much (if any) benefit to poor and low-income families in the United States is that minimum wages are not well-targeted at these families (Burkhauser et al, 1996).…”

The Extent of Economic Vulnerability in the Canadian Labour Market and Federal Jurisdiction: Is There a Role for Labour Standards?

“…American evidence is also consistent with this result (seeBurkhauser et al 1996).23 See Vallée (2005) for a model that suggests the universal provision of benefits.…”