Volume 38, Number 3 (Summer) 2003
Neumark, David, and Scott Adams. 2003. "Do Living Wage Ordinances Reduce Urban Poverty?" Journal of Human Resources 38(3):490-521.
Living wage ordinances typically mandate that businesses under
contract with a city or, in some cases, receiving assistance from a city, must
pay their workers a wage sufficient to support a family financially. We estimate
the effects of these ordinances on wages, hours, and employment in cities that
have adopted such legislation. We then examine the effects of these laws on
poverty. Our findings indicate that living wage ordinances boost wages of
low-wage workers. Moreover, we find a moderate negative employment effect.
Finally, some of the evidence suggests that living wages achieve modest
reductions in urban poverty.
David Neumark is Senior Fellow at the Public Policy Institute of
California, Professor of Economics at Michigan State University, and a Research
Associate of the NBER. Scott Adams is Assistant Professor of Economics at the
University of Wisconsin-Milwaukee. This research was partially supported by the
Michigan Applied Public Policy Research Funds and the Broad Graduate School of
Management, and was completed when Neumark was a Visiting Fellow at the Public
Policy Institute of California (PPIC). The views expressed do not reflect those
of the Public Policy Institute of California. We thank Jared Bernstein, Robert
Pollin, David Reynolds, Peter Schmidt, seminar participants at Harvard,
Illinois, Missouri, PPIC, Rand, UC-Berkeley, UC-Santa Cruz, and the University
of Washington, and anonymous referees for helpful comments. The data used in
this article can be obtained beginning February 2004 through January 2007 from
David Neumark, Department of Economics, Michigan State University, East Lansing,
MI 48824.
© 2003 by the Board of Regents of the University of Wisconsin System
US ISSN 0022-166X