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Table 5 Minimum wages and poverty

From: Policy levers to increase jobs and increase income from work after the Great Recession

      With state linear trends
Description of estimate Parameter Sample Estimate Elasticity Estimate Elasticity
A. Reported by Dube, based on NW (2011, Table 6a) Effect on P(earnings < poverty) Ages 21–44 −0.055 −0.29
B. Recomputed from NW data w/o EITC variables and dropping kids-state, kids-year interactions (standard panel specification) Effect on P(earnings < poverty) Ages 21–44 −0.051 (0.023) −0.27 −0.055 (0.025) −0.29
C. Same as B, but for poverty Effect on P(income < poverty) Ages 21–44 −0.032 (0.022) −0.22 −0.052 (0.032) −0.35
D. Same as B, but without upper age restriction Effect on P(earnings < poverty) Age ≥21 −0.013 (0.013) −0.04 −0.018 (0.024) −0.06
E. Same as C, but without upper age restriction Effect on P(income < poverty) Age ≥21 −0.020 (0.017) −0.15 −0.014 (0.018) −0.11
Subgroups
F. With kids Effect on P(income < poverty) Age ≥21 −0.024 (0.018) −0.18 −0.029 (0.031) −0.21
G. HS education or less Effect on P(income < poverty) Age ≥21 −0.031 (0.028) −0.19 −0.001 (0.022) −0.01
H. Black or Hispanic Effect on P(income < poverty) Age ≥21 −0.035 (0.029) −0.15 −0.026 (0.035) −0.12
I. Single females with kids Effect on P(income < poverty) Age ≥21 −0.108 (0.040) −0.30 −0.048 (0.081) −0.14
J. Single females with HS education or less Effect on P(income < poverty) Age ≥21 −0.033 (0.039) −0.12 −0.008 (0.041) −0.03
K. Single females, black or Hispanic Effect on P(income < poverty) Age ≥21 −0.026 (0.051) −0.07 −0.093 (0.065) −0.26
  1. Notes: All estimates are weighted, and standard errors are clustered on states. Linear probability estimates are reported. The minimum wage (MW) variable is the average of the log of the contemporaneous and lagged minimum wage. In the log earnings specification, $1 is substituted for zero earnings prior to taking logs. The estimates are robust to including state-specific linear trends. The sample is restricted to heads of families, primary individuals, or unrelated individuals. Estimates use same data and similar specification to Neumark and Wascher (2011)