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The Effect of Minimum Wages on Poverty in U.S. States

Liljeström, Mark LU (2024) NEKH01 20241
Department of Economics
Abstract
This paper examines what effect recent minimum wage increases have had on poverty rates in U.S. states. In the past fifteen years, some states have experienced substantial minimum wage increases while others have seen smaller increases or no changes at all. First, we review some theoretical arguments for and against increases in the minimum wage, discussing its potential effects on unemployment and poverty. We then apply a beta regression model to census data from U.S. states in 2012 and 2022 in order to determine whether states that enacted large minimum increases experienced greater or lesser reductions in poverty compared to states that did not. Our results suggest that
increases in the minimum wage and minimum cash wage for tipped... (More)
This paper examines what effect recent minimum wage increases have had on poverty rates in U.S. states. In the past fifteen years, some states have experienced substantial minimum wage increases while others have seen smaller increases or no changes at all. First, we review some theoretical arguments for and against increases in the minimum wage, discussing its potential effects on unemployment and poverty. We then apply a beta regression model to census data from U.S. states in 2012 and 2022 in order to determine whether states that enacted large minimum increases experienced greater or lesser reductions in poverty compared to states that did not. Our results suggest that
increases in the minimum wage and minimum cash wage for tipped workers, either alone or in combination, tended to increase poverty rather than alleviate it. (Less)
Please use this url to cite or link to this publication:
author
Liljeström, Mark LU
supervisor
organization
course
NEKH01 20241
year
type
M2 - Bachelor Degree
subject
keywords
Poverty, Minimum wage, Unemployment
language
English
id
9174518
date added to LUP
2024-09-24 08:41:11
date last changed
2024-09-24 08:41:11
@misc{9174518,
  abstract     = {{This paper examines what effect recent minimum wage increases have had on poverty rates in U.S. states. In the past fifteen years, some states have experienced substantial minimum wage increases while others have seen smaller increases or no changes at all. First, we review some theoretical arguments for and against increases in the minimum wage, discussing its potential effects on unemployment and poverty. We then apply a beta regression model to census data from U.S. states in 2012 and 2022 in order to determine whether states that enacted large minimum increases experienced greater or lesser reductions in poverty compared to states that did not. Our results suggest that
increases in the minimum wage and minimum cash wage for tipped workers, either alone or in combination, tended to increase poverty rather than alleviate it.}},
  author       = {{Liljeström, Mark}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{The Effect of Minimum Wages on Poverty in U.S. States}},
  year         = {{2024}},
}