The Effects of Minimum Wages on Poverty in the United States, 2008-2013

Abstract

This econometric study examines the effect of minimum wage increases on poverty and public program participation using individual-level data from the 2008 panel of the Survey of Income and Program Participation (SIPP), covering 2008 through 2013. Although many prior theoretical and empirical studies have sought to determine this relationship, economists have not reached a general consensus about the effects of minimum wage policies on poverty. Furthermore, the prior studies used data that predate the Great Recession. Using linear probability models and ordinary least squares, my analysis concludes that minimum wage increases may help reduce poverty for certain workers, but it has found little statistically significant evidence that minimum wages affect the likelihood of living in poverty or receiving public assistance for most of the population.