The effects of living wage laws on low-wage workers and low-income families: What do we know now?

Neumark, David; Thompson, Matthew; Koyle, Leslie

doi:10.1186/2193-9004-1-11

Table 3 Estimated effects of living wages on log wages and employment, lowest decile of wage distribution or predicted wage distribution (for employment), living wages defined at MSA/PMSA level, prior estimates and re-estimations for 1996-2002

From: The effects of living wage laws on low-wage workers and low-income families: What do we know now?

	Previous Estimates		Restricted to 79 MSAs/PMSAs in CMSAs		Restricted to 79 MSAs/PMSAs, corrected living wage laws		Same as columns (5) and (6), with city-specific trends		Larger sample of MSAs/PMSAs
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)
Dependent variable:	Log wages	Employment	Log wages	Employment	Log wages	Employment	Log wages	Employment	Employment
Specification 1
Log living wage, lagged 12 months	0.040	−0.053**	0.046*	−0.047**	0.043*	−0.066**	0.034	−0.061**	−0.061^**
Log living wage, lagged 12 months	(0.030)	(0.020)	(0.024)	(0.019)	(0.026)	(0.020)	(0.031)	(0.019)	(0.019)
Specification 2
Business assistance living wage laws:
Log living wage, lagged 12 months	0.067*	−0.076**	0.071**	−0.067**	0.080**	−0.069**	0.070*	−0.073**	−0.074^**
Log living wage, lagged 12 months	(0.039)	(0.018)	(0.028)	(0.020)	(0.030)	(0.020)	(0.037)	(0.021)	(0.021)
Contractor-only living wage laws:
Log living wage, lagged 12 months	−0.006	−0.027	0.005	−0.017	−0.007	−0.070**	−0.016	−0.043	−0.043
Log living wage, lagged 12 months	(0.037)	(0.033)	(0.035)	(0.031)	(0.028)	(0.035)	(0.040)	(0.032)	(0.032)
N	46,374	116,466	44,588	90,695	44,588	90,695	44,588	90,695	92,091

The estimates in columns (1) and (2) are from Adams and Neumark (2005a, Tables 2 and 4). The data on labor market outcomes and other worker-related characteristics come from the Current Population Survey (CPS) monthly Outgoing Rotation Group files (ORGs/MORGs), from January 1996 through December 2002. Only observations on city-month or city-year cells with 25 or more observations are retained. The living wage variable is the maximum of the log of the living or minimum wage, and so equals the minimum wage when there is no living wage. The regressions include controls for city, year, month, log minimum wages, and other individual-level controls. All specifications also allow differential linear time trends for cities passing or not passing living wage laws, or passing different types of laws, except columns (7) and (8). The entries in the first row are from a specification with a single living wage variable, and the entries in the second and third rows are from a specification that interacts the living wage variable with dummy variables for the type of living wage. The MSAs/PMSAs beginning in columns (3)-(4) are the MSAs and PMSAs that constitute the 39 CMSAs that we can track for the entire sample period and that meet the data sufficiency requirement (50 valid wage observations per MSA/PMSA and month). The list of these 79 MSAs/PMSAs used in columns (3)-(6) is available from the authors upon request. There are 86 MSAs/PMSAs in column (9), where we do not impose the same data sufficiency requirement on the employment and wage samples. Estimates are weighted by individual sample weights. ‘^**’ (‘^*’) superscript indicates estimate is statistically significant at five-percent (ten-percent) level. Reported standard errors are robust to nonindependence (and heteroscedasticity) within city cells (clustered by city).

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