the highs and lows of the minimum wage effect a time series cross section study of the canadian law we examine the effects of minimum wage legislation in canada over the period 1975 93 for teenagers we find that a 10 increase in the minimum wage is associated with roughly a 2 5 decrease in employment we also find that this result is driven by low frequency variation in the data at high frequencies the elasticity is positive and insignificant the difference in the elasticity across the bandwidth has implications for the interpretation of employment dynamics as a result of minimum wage policy and experimental design in minimum wage studies it also provides a simple reconciliation of the new minimum wage research which reports very small negative or positive elasticities

food preferences and nutrition in rural bangladesh t he dietary choice of households near subsistence levels of nutrient intake is one of obvious policy importance in many countries such as bangladesh national goals are set in terms of nutritional intake and there is heavy intervention in the markets for foods however little is known about the manner in which food preferences vary with food expenditure and nutrient intake the design of efficient programs to aid nutritionally deficient households in attaining minimal levels of nutrient intake requires information on all ownand cross price elasticities for both target and non target groups the net effect of a food price subsidy on the consumption of food nutrients cannot be predicted without knowledge of the complete elasticity matrix results presented below demonstrate that substitution effects can be so strong that the subsidization of certain foods quite often reduces nutrient consumption in this study demand equations for nine foods which allow for extremely flexible consumer price response are estimated from the individual budgets of 5 750 rural bangladeshi households estimation at the household level is preferred because it more readily permits the incorporation of household composition variables into the demand analysis such as household size occupation and employment status that are typically lost in aggregation there is also a greater range and variation in expenditure levels than found in grouped data this is of particular importance in the study of nutritional well being as it is the poorest households which are of special interest moreover the household sample provides sufficient degrees of freedom to estimate a simple varying parameter model which requires the estimation of 270 parameters previous econometric analysis of income class specific dietary choice has been limited and not altogether satisfactory pinstrup anderson de londono and hoover 1976 estimated complete sets of price elasticities for different income strata using frisch s scheme in order to study the impact of changes in relative prices on nutrient consumption their results are suspect because of the assumption of want independence necessary for this methodology to be valid alderman and timmer 1980 who were also concerned with studying the relationship between food price policy and nutrient intake by income classes econometrically estimated separate price coefficients for each income group by including slope dummy variables in their demand equations for rice and cassava in indonesia the inclusion of these dummy variables revealed surprisingly large differences in compensated price response across income groups although their results support the notion that poorer households respond differently to prices than the rich the limitations of their data constrained them to consider only two foods and to specify changes in price response which are discontinuous with respect to income i the formulation and estimation of the food demand equations is discussed in section ii below section iii presents the results of the estimation and discusses the nutritional implications of movements in relative food prices and other exogenous variables section iv summarizes our findings

a food demand system based on demand for characteristics if there is curvature in the slutsky matrix what do the curves look like and why abstract a food demand system is proposed based on demand for energy variety and tastes of foods by specifying utility as an explicit function of these characteristics the entire matrix of demand elasticities can be derived for n foods and one non food from prior specification of just four elasticities while avoiding any assumption of separability between foods this framework can explain why poorest groups often are most price responsive but also can account for highest price responsiveness by middle income groups the system is applied to published food consumption data for urban and rural populations in pakistan elasticities are compared with those obtained in a published pakistan study applying an almost ideal demand system aids

the minimum wage as a redistributive tool most analyses of the minimum wage focus on its unintended employment consequences the goal of a minimum wage is not of course to reduce employment but to redistribute earnings to low paid workers under what conditions can a minimum accomplish this are those conditions met in economies which otherwise rely extensively on markets to set wages such as the united states which in i994 rejected mandating health benefits that would have effectively raised the minimum or the united kingdom where in i995 the labour party promised a national minimum upon election who pays for the redistribution who benefits the redistributive effects of a minimum wage depend on the labour market and redistributive system in which it operates on the level of the minimum and on its enforcement at best an effective minimum wage will shift the earnings distribution in favour of the low paid and buttress the bottom tiers of the distribution from erosion at worst minimum wages reduce the share of earnings going to the low paid by displacing many from employment neither outcome is certain so that enacting a minimum is a risky but potentially profitable investment in redistribution it is the balancing of risk against gain that makes a minimum so controversial until the i980s i99os competitive labour markets in the united states and united kingdom produced rising real earnings for the low paid and falling earnings inequality so the risk of enacting a national minimum united kingdom or of raising substantially the national minimum united states seemed unnecessary why interfere with the competitive market when it produces socially desirable trends in earnings albeit a bit slower than one might accomplish with a legislated minimum two decades of falling real wages for lower decile workers in the united states and of rising earnings inequality in the united kingdom1 have however put the minimum back in play the job market is not doing much for lower paid workers in the united kingdom virtually all social groups accept the need for some redistribution though they differ on the best way to accomplish such in the united states pressures for tax cuts can be interpreted as a way for employees to gain real wage increases unavailable through the market the consensus favouring redistribution through the earned income tax credit disappeared in the midi 990s rush to reduce federal budget deficits this paper takes as its operating premise the goal of redistributing earnings

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 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

using regional variation in wages to measure the effects of the federal minimum wage the imposition of a national minimum wage standard provides a natural experiment in which the treatment effect varies across states depending on the fraction of workers initially earning less than the new minimum the author exploits this fact to evaluate the effect of the april 1990 increase in the federal minimum wage on teenagers wages employment and school enrollment comparisons of grouped and individual state data confirm that the rise in the minimum wage increased teenagers wages there is no evidence of corresponding losses in teenage employment or changes in teenage school enrollment

employment effects of minimum and subminimum wages panel data on state minimum wage laws using panel data on state minimum wage laws and economic conditions for the years 1973 89 the authors reevaluate existing evidence on the effects of a minimum wage on employment their estimates indicate that a 10 increase in the minimum wage causes a decline of 1 2 in employment among teenagers and a decline of 1 5 2 in employment for young adults similar to the ranges suggested by earlier time series studies the authors also find evidence that youth subminimum wage provisions enacted by state legislatures moderate the disemployment effects of minimum wages on teenagers

work history and later life labor force participation evidence from a large telecommunications firm this study examines the relationship between later life labor force participation and work history survey data on 1 805 bell canada early retirees show that 40 returned to work of whom 17 took full time employment 51 took part time employment and 32 became self employed return to work was positively related to work attachment and tenure in the last job and negatively related to having been in a non managerial occupation and lacking upward career mobility those with high attachment to work as measured by responses to several survey questions were more likely to return to full time employment than to retire clerical workers were less likely than managers to choose part time employment over retirement both lateral versus upward mobility in the last job and high work attachment were negatively related to the choice of self employment over retirement

minimum wages and poverty the principal justification for minimum wage legislation resides in improving the economic condition of low wage workers most previous analyses of the distributional effects of minimum wages have been confined to simulation exercises employing rather restrictive assumptions that guarantee the conclusion that an increase in the minimum wage reduces poverty in contrast we adopt a more flexible reduced form approach that links increases in both federal and state minima to contemporaneous changes in poverty rates for the period 1983 96 we find indication of a poverty reducing effect of minimum wages among older junior high dropouts and among teenagers

the distributional and efficiency effects of increasing the minimum wage a simulation the generally accepted goal of minimum wage laws is to alter the distribution of income in favor of low income households however since a minimum wage will also disrupt low wage labor markets causing inefficiencies and imposing costs on some of the same workers the law is intended to help an evaluation of the policy requires a weighing of the distributional benefits against the efficiency costs quantification of these benefits and costs is clearly important to this evaluation while much effort has been devoted to estimating the employment effects of minimum wage laws relatively little work has been done to estimate the distributional benefits our simulations focus on this efficiency equity tradeoff by developing estimates of the impact of an increase in the minimum wage on the level and distribution of real income across households previous work has concluded that minimum wages are not as beneficial in their distributional impact as generally supposed

getting handcuffs on an octopus theoretical work on minimum wage policy emphasizes labor market dynamics but the resulting implications for worker mobility remain largely untested the authors show that in the teenage labor market higher minimum wage standards reduce worker flows and increase job stability furthermore they find that the employment effects of a relatively higher minimum wage vary considerably across markets with different levels of turnover and labor market tightness results help to explain the small effects of minimum wage standards on employment commonly found in the aggregate data and are consistent with labor market models that involve search frictions

estimation and inference of distributional partial effects theory and application abstractthis article considers nonparametric and semiparametric estimation and inference of the effects of a covariate either discrete or continuous on the conditional distribution of a response outcome it also proposes various uniform tests following estimation this type of analysis is useful in situations where the econometrician or policy maker is interested in knowing the effect of a variable or policy on the whole distribution of the response outcome conditional on covariates and is not willing to make parametric functional form assumptions monte carlo experiments show that the proposed estimators and tests are well behaved in small samples the empirical section studies the effect of minimum wage hikes on household labor earnings it is found that the minimum wage has a heterogenous impact on household earnings in the u s and that small hikes in the minimum wage are more effective in improving the household earnings distribution

the effects of location based tax policies on the distribution of household income evidence from the federal empowerment zone program abstract location based tax policies are redistributive as evidenced by their placement in distressed areas however the previous literature has focused on mean effects which can mask important effects that the program has on the distribution of households therefore we extend the literature by studying changes in the entire household income distribution in the context of the federal empowerment zone ez program we do not find evidence that the impoverished residents benefited from the program our findings are consistent with the areas becoming more attractive to high income households the improvements in the areas were concentrated in those portions of each zone that were relatively better off prior to ez designation the results confirm the prior literature findings that the areas on average became more attractive but also suggest that the benefits of the program likely did not accrue to the lower income residents of the ez areas

nutrient demand and the allocation of time evidence from guam this paper presents an econometric study of nutrient intake in guam which explicitly accounts for household time allocation and household capital variables the empirical framework is based on a household production model of nutrient consumption food expenditure and the allocation of time between labour leisure and food preparation activities the study finds evidence that 1 capital and wage variables have significant impacts on households nutrient demands 2 income wage and educational status have very different effects on the nutrient choices of low calorie households than on the nutrient choices of high calorie households and 3 a family s participation in the food stamp programme leads to higher levels of food expenditure but this impact is attributable to the purchase of more costly taste characteristics in food rather than to the purchase of more nutritious foods

minimum wage effects throughout the wage distribution this paper provides evidence on a wide set of margins along which labor markets can adjust in response to increases in the minimum wage including wages hours employment and ultimately labor income not surprisingly the evidence indicates that low wage workers are most strongly affected while higher wage workers are little affected workers who initially earn near the minimum wage experience wage gains nevertheless their hours and employment decline and the combined effect of these changes on earned income suggests adverse consequences on net for low wage workers

effective policy for reducing poverty and inequality the earned income tax credit and the distribution of income we examine the effect of the eitc on the poverty and income of single mothers with children using a quasi experimental approach that leverages variation in generosity due to policy expansions across tax years and family sizes we find that the income increasing effects of the eitc are concentrated between 75 and 150 percent of income to poverty with little effect at the lowest income levels and at levels of 250 percent of poverty and higher we use these results to show that by failing to capture the indirect effects of the credit on earnings static calculations of the antipoverty effects of the eitc may be underestimated by almost 50 percent abstract from author

transitions from welfare and the employment prospects of low skill workers this study examines the effects that labor market conditions and welfare policy changes had on single mothers welfare participation and economic outcomes using longitudinal individual level data from the 1992 and 1993 panels of the survey of income and program participation sipp the study uses special versions of the sipp panels that include state and county identifiers and links the individual information to county specific measures of low skill employment opportunities and state measures of welfare policies it estimates transition models of program entry and exit and regression models of economic outcomes the study finds that employment conditions and welfare benefit levels were significant determinants of single mothers welfare participation and economic success over the period 1992 95 however it does not find statistically distinguishable differences in participation and economic success between states that did and did not reform their welfare programs through waivers to the federal rules jel classification i3 j3

are minimum wages a silent killer new evidence on drunk driving fatalities abstract in volume 94 of this review adams blackburn and cotti abc using fatal accident reporting system data from 1998 to 2006 find that a 10 increase in the minimum wage is associated with a 7 to 11 increase in alcohol related fatal traffic accidents involving teen drivers we find this result does not hold when the analysis period is expanded to include 1991 through 2013 in addition auxiliary analyses provide no support for income driven increases in alcohol consumption the primary mechanism posited by abc together our results suggest that minimum wage increases are not a silent killer

the effect of marital breakup on the income distribution of women with children having a female firstborn child significantly increases the probability that a woman s first marriage breaks up recent work has exploited this exogenous variation to measure the effect of divorce on economic outcomes and has concluded that divorce has little effect on women s mean household income however using a quantile treatment effect methodology abadie et al 2002 we find that divorce widens the income distribution it increases the probability that a woman has very low or very high household income it appears that some women successfully generate income through child support welfare combining households and increased labor supply after divorce while others are markedly unsuccessful thus although divorce has little effect on mean income it nonetheless increases poverty and inequality these findings imply that divorce has important welfare consequences

the effects of the minimum wage in brazil on the distribution of family incomes 1996 2001 abstract the brazilian economy has long relied on the minimum wage having first implemented a minimum in 1940 shortly after taking office in 2003 brazil s president raised the minimum wage by 20 and promised to double the value of the minimum wage before his term ends in 2006 the usual rationale for minimum wage increases is to bring about beneficial changes in the income distribution by raising incomes of poor and low income families the goal of this paper is to evaluate the efficacy of the minimum wage in brazil in bringing about these changes in the income distribution we examine data drawn from brazil s major metropolitan areas studying the years after brazil s hyper inflation ended the estimates provide no evidence that minimum wages in brazil lift family incomes at the lower points of the income distribution if anything some of the evidence points to adverse effects on lower income families

the microeconomics of the developmental paradox on the political economy of food price policy abstract a longstanding puzzle in comparative economics is the developmental paradox the tendency for government support for agriculture to increase with national income and to decrease with the proportion of economic activity and of the population in agriculture this paper offers a microeconomic explanation for that puzzle it establishes analytically the microeconomic basis for coalition alignments with respect to food price policy then numerically simulates the comparative static effects of alternative food policies on coalition structure a parsimonious household model applied to a heterogeneously endowed society demonstrates how variation in individual welfare effects might beget distinct coalitions in the debate over food price policy and how those policies are inextricably linked to land population and technology policies in food agriculture moreover coalition alignments on particular policy debates are path dependent in particular food price policy creates its own political support

disaggregating food consumption parameters designing targeted nutritional interventions abstract this article is concerned with a new nutritional intervention strategy which is based on the belief that malnourished people eat different types of food to the well nourished the calculation of disaggregated food consumption parameters can identify inferior food commodities and the subsidization of these commodities will target intervention to those most in need the effectiveness of this policy depends on the understanding of its theoretical basis the author introduces the policy maker to this by reviewing the theoretical basis for consumption analysis and then several key studies

effects of subsidized wheat consumption by state in india this paper reports the results of a study of the effects of the indian government s consumer subsidies on wheat demand results indicate consumption of subsidized wheat is higher in urban areas than in rural areas the public distribution of wheat in most states had little effect on demand in the commercial market which suggests the government is effective in targeting subsidized wheat to poor consumers

the effects of minimum wages on the distribution of family incomes a nonparametric analysis an oft stated goal of the minimum wage is to raise incomes of poor or low income families we present nonparametric estimates of the effects of minimum wages on the distribution of family income relative to needs in the united states although minimum wages increase the incomes of some poor families the evidence indicates that their overall net effect is if anything to increase the proportions of families with incomes below or near the poverty line it would appear that reductions in the proportions of families that are poor or near poor should not be counted among the potential benefits of minimum wages

do minimum wages fight poverty i introduction one of the most compelling rationales for a national minimum wage floor is to raise the incomes of poor or near poor families with members in the workforce this general point however is often missed in the debates over the merits of a higher minimum wage in contrast to these oft stated distributional goals much of the focus in such debates has been on the employment effects of minimum wages especially among the teenage population in large part this focus is probably attributable to the extensive body of economic research on the effects of minimum wages on employment of low skilled workers however although negative employment effects represent a cost of minimum wages such costs do not necessarily imply that minimum wages constitute bad social policy in particular the employment losses associated with a higher minimum wage may be more than offset by positive effects on low income families especially if minimum wages are a significant factor in helping move families out of poverty 1 this is not to argue that research on employment effects of minimum wages is irrelevant but such research may be more important as a test of the theory of labor demand and as a method of learning how employers and individuals adjust to exogenous wage increases than as a method of assessing the wisdom of the policy in addition we do not mean to suggest that the short run effects of minimum wages on the incomes of poor families should be the sole criterion for evaluating such policies other studies have found evidence suggesting for example that minimum wage increases reduce school enrollment rates and training neumark and wascher 1996a hashimoto 1982 factors that may affect longer run earnings or earnings growth these deleterious longer run effects might offset the benefits of shorter run effects of minimum wages on family incomes nonetheless our perception is that potential increases in the incomes of poor families provide the main motivation for raising the minimum wage making it important to assess the evidence on whether minimum wage increases achieve this goal in this regard there are two questions that pertain to the influence of minimum wages on family incomes generally and on poverty in particular first there is the question of the effects of minimum wages on low wage workers that is do the wage gains received by employed workers more than offset the lost earnings suffered by those who lose or cannot find jobs 2 second there is the question of how minimum wages affect workers in different parts of the family income distribution because many roughly speaking a large minority of minimum wage workers are in relatively affluent families gramlich 1976 card and krueger 1995 burkhauser et al 1996 which workers gain and which lose will have an important influence on the effects of minimum wages on the distribution of family incomes in this article we present evidence on the effects of minimum wages on family incomes focusing in particular but not solely on the effectiveness of minimum wages in reducing poverty using matched march current population surveys cpss we estimate the effects of minimum wages on the probabilities of various transitions in the family income distribution such as transitions into and out of poverty given that federal changes in minimum wages may be confounded with other aggregate level shocks influencing family income we rely heavily on state level changes in minimum wages to identify minimum wage effects in a nutshell our empirical strategy is to compare rates of transition through the family income distribution in states in which minimum wages do and do not increase for example if poor families are more likely to escape from poverty when minimum wages increase in their states of residence we would infer that minimum wage hikes help families move out of poverty on the other hand if transitions in to poverty are more common when minimum wages increase we would infer that the disemployment effects of minimum wages play a dominant role among the low income population

on price risk and the inverse farm size productivity relationship abstract the oft observed inverse relationship between farm size and productivity has elicited several explanations having important policy and theoretical implications using advances in the analysis of price risk effects on producer behavior and a simple two period model of an agricultural household that both produces and consumes under price uncertainty at the time labor allocation decisions are made this paper demonstrates analytically that a non degenerate land distribution and price risk can together produce an inverse relationship even absent any of the more common explanations empirical evidence from madagascar confirms the plausibility of this intuitive explanation for the phenomenon

food demand studies in sub saharan africa a survey of empirical evidence abstract the recent empirical food demand studies on sub saharan africa show significant advances in demand specification and methodology especially in the application of less restrictive and theoretically consistent flexible functional forms the findings to date establish some broad patterns on effect of income household demography and life cycle location and prices on food demand patterns however the numerical values of the demand estimates are less generalizable because of an insufficient number of data points to separate the true demand component from other confounding factors which are linked to differences in modeling and estimation of demand relations the priority for future research is to generate sufficiently detailed demand estimates that have a high utility for disaggregated policy analysis but are based on a theoretically consistent and comparable methodology

the spending and debt response to minimum wage hikes abstract immediately following a minimum wage hike household income rises on average by about 250 per quarter and spending by roughly 700 per quarter for households with minimum wage workers most of the spending response is caused by a small number of households who purchase vehicles furthermore we find that the high spending levels are financed through increases in collateralized debt our results are consistent with a model where households can borrow against durables and face costs of adjusting their durables stock jel d12 d14 d91 j38

is there curvature in the slutsky matrix d o the poor substitute among commodities more flexibly than the rich when relative prices change even when compensated for the income effects of the price changes is it necessary to add a third dimension to the slutsky substitution matrix to identify household income in short do the terms of the slutsky elasticity matrix curve smoothly from poor households to rich households in such a way that equation 1 is meaningful

migration the life cycle and state benefits how low is the bottom i show that among women likely to use welfare movers move to higher benefit states i also find that the probability likely welfare users will move at all is lower in higher benefit states this effect is concentrated early in the life cycle as theory predicts i construct a theoretical framework to measure the impact of welfare migration on optimal state benefits simulation results suggest little impact in higher benefit states but possibly a more substantial impact in other states finally evidence suggests little reason for concern due to welfare migration in using cross state variation in welfare generosity to identify incentive effects of the welfare system on other outcome variables

minimum wages and poverty will a 9 50 federal minimum wage really help the working poor using data drawn from the march current population survey we find that state and federal minimum wage increases between 2003 and 2007 had no effect on state poverty rates when we then simulate the effects of a proposed federal minimum wage increase from 7 25 to 9 50 per hour we find that such an increase will be even more poorly targeted to the working poor than was the last federal increase from 5 15 to 7 25 per hour assuming no negative employment effects only 11 3 of workers who will gain live in poor households compared to 15 8 from the last increase when we allow for negative employment effects we find that the working poor face a disproportionate share of the job losses our results suggest that raising the federal minimum wage continues to be an inadequate way to help the working poor

lobbying for minimum wages using a common agency lobbying framework this paper illustrates how the minimum wage set reflects the interaction between economic and political factors and under what circumstances will the policymaker be induced through lobbying to change the minimum wage specifically when the labor demand elasticity is large lobbying is successful in inducing the policymaker to set the minimum wage in accordance with her political ideology however the paper also shows the conditions under which lobbying will reverse the ideological preference and induce a business friendly government to increase the minimum wage empirical analysis on a panel data for ten canadian provinces gives considerable support for theoretical predictions the real minimum wage decreases in skill adjusted union density and political ideology while larger labor demand elasticity reinforces the influence of political ideology in the presence of lobbying jel j38 d72 d78

minimum wage effects under endogenous compliance evidence from peru latin american labor markets feature large informal sectors in practice however the simple duality formal informal has many different shades firms tend to comply more with certain legislation than with other recent evidence has suggested that minimum wages have significant effects on the informal sector bell 1997 for mexico gindling and terrell 2004 for costa rica lemos 2004 and fajnzylver 2001 for brazil and maloney and nunez 2004 for colombia further some of this evidence suggests effects throughout a large part of the wage distribution this has been interpreted as evidence of lighthouse or numeraire effects we test this hypothesis using panel data from peru to identify effects throughout the wage distribution although there are some effects on informal sector workers overall results provide little support for numeraire or lighthouse effects labor monthly earnings are affected only at the bottom of the distribution 0 25 0 60 of the minimum wage made up mostly of informal workers and for formal workers earning between the old the new minima negative effects on the probability of retaining employed status after a minimum wage shock are either weak or non significant for wage earners below the minimum wage but significant for formal workers trapped between minima and for both formal and informal earning between 1 2 and 2 times the minimum wage independent workers earning below minimum suffer negative effects on both earnings and employment