Neumark, David, Mark Schweitzer, and William Wascher. 2005. “The Effects of Minimum Wages on the Distribution of Family Incomes: A Nonparametric Analysis.” Journal of Human Resources 40(4): 867-894.

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.

David Neumark is Senior Fellow, Public Policy Institute of California, a Research Associate of the NBER, and a Research Fellow at IZA Research at UC-Berkeley. Mark Schweitzer is Assistant Vice President and Economist, the Federal Reserve Bank of Cleveland. William Wascher is Deputy Associate Director in the Division of Research and Statistics at the Board of Governors of the Federal Reserve System. The authors thank Rebecca Blank, Harry Holzer, Sanders Korenman, Thomas Lemieux, Walter Oi, Dan Sichel, anonymous referees, and seminar participants at Essex University, Michigan State, NYU, Northwestern, Berkeley, UC-Irvine, VPI, and the OECD for helpful comments. The views expressed are those of the authors only, and do not necessarily reflect those of the Public Policy Institute of California, the Federal Reserve Board, the Federal Reserve Bank of Cleveland, or their staffs. The data used in this article can be obtained beginning May 2006 through April 2009 from Mark Schweitzer, Federal Reserve Bank of Cleveland, P.O. Box 6387, Cleveland, OH, 44101-1387, Mark.E.Schweitzer@clev.frb.org.