The ”Poverty Trap” and Living Wage Laws

Toikka, Richard S.; Yelowitz, Aaron; Neveu, Andre R.

doi:10.1177/0891242404268707

Cited by 6 publications

(4 citation statements)

References 2 publications

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“…This means that some significant share of the benefits from living wage standards becomes a leakage -with government agencies, rather than low-wage workers and their families, becoming the beneficiaries of the law" (p. 108). And, in fact, the magnitude of this "leakage" (which is exactly the same as the implicit marginal tax rate) is in the range of that estimated by Toikka et al (2005). In particular, for Santa Monica, Pollin et al estimate that only 50% of the increased earnings actually benefits families, or that the marginal tax rate is 50%.…”

Section: Discussionmentioning

confidence: 57%

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

2012

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We provide updated evidence on the effects of living wage laws in U.S. cities, relative to the earlier research covering only the first six or seven years of existence of these laws. There are some challenges to updating the evidence, as the CPS data on which it relies changed geographic coding systems in the mid-2000s. The updated evidence is broadly consistent with the conclusions reached by prior research, including a recent review of that earlier evidence. Living wage laws reduce employment among the least-skilled workers they are intended to help. But they also increase wages for many of them. This implies that living wage laws generate both winners and losers among those affected by them. For broader living wage laws that cover recipients of business or financial assistance from cities, the net effects point to modest reductions in urban poverty. JEL codes: J23, J38

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Section: Discussionmentioning

confidence: 57%

“…The results were very similar. 39 Earlier work on this question includes Shaviro (1999) and Toikka et al (2005), although neither looks at longitudinal evidence on what happens when living wages are implemented.…”

Section: Discussionmentioning

confidence: 99%

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

2012

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“…This means that some significant share of the benefits from living wage standards becomes a leakagewith government agencies, rather than low-wage workers and their families, becoming the beneficiaries of the law" (p. 108). And, in fact, the magnitude of this "leakage" (which is exactly the same as the implicit marginal tax rate) is in the range of that estimated by Toikka et al (2005). In particular, for Santa Monica, Pollin et al estimate that only 50% of the increased earnings actually benefits families, or that the marginal tax rate is 50%.…”

Section: Discussionmentioning

confidence: 94%

The Effects of Living Wage Laws on Low-Wage Workers and Low-Income Families: What Do We Know Now?

Neumark¹,

Thompson²,

Koyle³

2013

SSRN Journal

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“…Because students eligible for FRPM participate in school lunch at much higher rates than students who are not eligible, 12 and since FRPM eligibility is based on income, it is likely that as students' family incomes rose, fewer students were FRPM eligible, and thus, fewer students participated in school lunch. There is debate in the literature about potential unintended consequences of minimum wage increases for vulnerable families, with some suggesting that the phase-out rate of benefit programs (such as cash welfare and housing assistance) outpaces the benefits of increased earnings, 25 while others argue that families working more and for higher wages are better off. 26 Better understanding how school meal eligibility and participation may be impacted by changes in minimum wage laws is needed.…”

Section: Discussionmentioning

confidence: 99%

The Impact of a Multipronged Intervention to Increase School Lunch Participation among Secondary School Students in an Urban Public School District

et al. 2020

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Introduction: Schools meals offer a critical opportunity for improving youths' diets, particularly for economically disadvantaged students. We examine the impact of a multipronged intervention to increase middle and high school students' lunch participation in an urban school district.Methods: In school years 2015-2016 through 2017-2018, a quasi-experimental study was conducted in 24 secondary schools, half (n = 12) of which received the following intervention: cafeteria redesign, additional school lunch points-of-sale (mobile carts and vending machines), and teacher education.Results: From baseline to follow-up, lunch participation dropped 4.1% in intervention and 5.1% in comparison schools (difference-in-difference 1.0%, 95% CI 0.5-1.4). The overall decline in lunch participation occurred simultaneously with a drop-in free or reduced-price meal eligibility (from 72% to 58%) across all schools, which is likely related to changing local economic conditions, including a county-wide minimum wage increase that began in summer 2015. Among students eligible for free or reduced-price meals, participation decreased 1.8% in intervention and 4.9% in comparison schools (difference-in-difference 3.1%, 95% CI: 2.5-3.7), with a larger difference-in-difference seen in high schools (5.0%, 95% CI: 4.2-5.9) than middle schools (1.8%, 95% CI: 0.8-2.6).Conclusions: While this intervention demonstrated a modest, but significant relative increase in school lunch participation, the effect was not sufficient to halt large district-wide declines in participation during this study period. Given the significant time, money, and political capital required to implement the intervention, districts should carefully consider similar investments. Broader public policies or other changes to economic conditions that affect eligibility for means-tested benefits-in this case, a strengthening local economy coupled with an increased local minimum wage-may influence school lunch participation more than school-level interventions.

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The ”Poverty Trap” and Living Wage Laws

Cited by 6 publications

References 2 publications

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

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

The Effects of Living Wage Laws on Low-Wage Workers and Low-Income Families: What Do We Know Now?

The Impact of a Multipronged Intervention to Increase School Lunch Participation among Secondary School Students in an Urban Public School District

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