Does the minimum wage affect welfare caseloads?

Although minimum wages are advocated as a policy that will help the poor, few studies have examined their effect on poor families. This paper uses variation in minimum wages across states and over time to estimate the impact of minimum wage legislation on welfare caseloads. We find that the elasticity of the welfare caseload with respect to the minimum wage is between 0.1 and 0.2, but this estimate is sensitive to the sample period and assumptions about state trends. We tentatively conclude that higher minimum wages increase welfare dependence; however, more research is warranted.© 2005 by the Association for Public Policy Analysis and Management     

Welfare,work experience,and economic self‐sufficiency

The potential of former AFDC recipients to earn a living wage is central to the success of welfare‐to‐work programs. Previous studies have found that welfare recipihyphen;ents see little increase in their wages over time. Low wage growth could arise from either low returns to work experience or low levels of experience. This distinction is important for designing effective welfare policy. In the following paper, we estimate how wages grew with work experience between 1978 and 1992 for a national sample of women from the National Longitudinal Survey of Youth. We compare women who never received welfare with both short‐ and long‐term recipients in order to see to what extent the rates of wage growth with work experience differ. We find that they differ very little. We use numerous specification checks to test the robustness of our results and find consistent evidence that the wages of AFDC recipients grew at a rate similar to those of nonrecipients once work experience is taken into account. © 2001 by the Association for Public Policy Analysis and Management.     

Determinants of congressional minimum wage support: the role of economic education

Much has been made about the lack of economic education among the public at large, yet little has been said about the limited education of Members of Congress. This paper examines the economic education levels of Members of Congress voting on the 2007 increase in the minimum wage. Controlling for a variety of characteristics of members and constituents, this study finds that members who majored in economics as undergraduates were less likely to vote for the minimum wage increase than their colleagues. No other major had a consistent influence. A large number of statistical specifications confirm the robustness of the finding.     

Wage subsidies as a labour market policy tool

In this paper, the author argues that wage subsidy is a valuable policy tool in the face of structural changes such as would result from the removal of tariffs, or in the face of a need to assist the disadvantaged or redress distributional inequity. After discussing wage subsidies that target specific segments of the population, which has the potential to improve both static and dynamic efficiency, the author goes on to discuss and contrast his universal wage subsidy proposal with the negative income tax and the minimum wage legislation, all of which are designed mainly for distributional purposes.     

The minimum wage and the poor: The end of a relationship

The belief that minimum-wage legislation helps the working poor is one reason for its continued popular support. The authors track the household incomes of low-wage workers and find that a radical transformation has occurred in the half century since the passage of the original minimum-wage law. Today most low-wage workers live in households well above the poverty line. Hence, those living in poverty will get only about 11 percent of the gains from the higher minimum-wage increase proposed in the Kennedy-Hawkins Bill. Low-wage workers in families with incomes three or more times the poverty line will get nearly 40 percent. Thus it is not clear that increases in the minimum wage make good policy even if no jobs are lost as a result.     

Social policy implications of the minimum wage law

Poverty and unemployment are two critical issues facing the United States today. Linked to both of these is the federal minimum wage law. Established under the Fair Labor Standards Act of 1938, the purpose of the law was—and still is—to eliminate, as rapidly as possible, labor conditions thought to be harmful to the “health, efficiency, and general well-being of workers ... without substantially curtailing employment or earning power.”¹ In other words, to eliminate low wages without eliminating jobs. This is a laudable goal, with which no one is likely to disagree. The question remains as to how effective the law has been in achieving this goal. Has it eliminated poverty? Or has it, to the contrary, had effects detrimental to those the law was designed to help? It is the contention here that the minimum wage law has played a significant role in causing unemployment among the most disadvantaged groups, including blacks, teenagers, unskilled workers, and people living in economically depressed regions. It is therefore proposed that further increases in the minimum wage be blocked and that the rate and coverage be held at the present level.     

Minimum wages and the economic well‐being of single mothers

Using pooled cross‐sectional data from the 1992 to 2005 March Current Population Survey (CPS), this study examines the relationship between minimum wage increases and the economic well‐being of single mothers. Estimation results show that minimum wage increases were ineffective at reducing poverty among single mothers. Most working single mothers were not affected by minimum wage hikes because they already earned wages above state and federal minimum wages. And less‐educated single mothers who were affected did not see a rise in net income because of negative employment and hours effects. For this low‐skilled population, a 10 percent increase in the minimum wage was associated with an 8.8 percent reduction in employment and an 11.8 percent reduction in annual hours worked. © 2008 by the Association for Public Policy Analysis and Management     

The determinants of minimum wage rates

This paper attempts to test the degree of responsiveness of Canadian provincial governments to different political groups in establishing their relative minimum wage policies over the 1975–1982 period. It discusses alternative explanations of minimum wage policies and focuses on the political market approach, where women, youth, small business and unions play a role. An econometric model is specified and estimated on pooled annual time series and cross-section data for nine provinces in Canada. The results tend to support most of the hypotheses.     

Does the Wage Tax System Cause Budget Deficits A Macro-Economic Experiment

In this paper we investigate experimentallythe economic functioning of a wage taxsystem for financing unemployment benefits in aninternational economy, in particular inreaction to budget deficits and taxadjustment. Our results support the hypothesisthat due to out-of-equilibrium priceuncertainty producers are reluctant toemploy inputs. We also observe a downward pressureon wages exacerbated by an over-supply of labor by consumers. Theseobservations can explain the budgetdeficits found. Furthermore, we find that taxadjustments in order to facilitate abalancing of the budget has strong adverse effects onunemployment and real GDP.     

Do electoral institutions have an impact on population health?

There is an emerging political economics literature which purports to show that legislatures elected based on proportional electoral rules spend more and redistribute more than legislatures elected based on majoritarian electoral rules. Going a step further the authors of this paper consider whether degree of electoral proportionality has an impact on population health and, in particular, the health of the least advantaged members of society. A panel of 24 parliamentary democracies for the years 1960?C2004 is used to examine the relationship between electoral institutions and health. The authors find that greater electoral proportionality is positively associated with overall population health (as indicated by life expectancy) and with the health of the poorest (as indicated by a reduction in infant mortality). A panel of 17 countries for the years 1970?C2004 is then used to show to that electoral permissiveness modifies the impact of health spending on infant mortality.     

Introduction to the issue in honor of Keith T. Poole

William Baumol’s model predicts a steady increase in relative public sector prices (or costs) because of the combination of slow productivity growth and wage growth similar to sectors wherein productivity is growing more quickly. In this paper, we extend the Baumol model with political variables and analyze price growth in defense and public administration using Norwegian data. We find strong support for the mechanism of the Baumol model since manufacturing productivity is the most important determinant of relative public-sector prices. Greater political fragmentation has also contributed to the price growth, but its quantitative effect is smaller than that of manufacturing productivity. An analysis of a labor-intensive private service (restaurants and cafes) supports the broader relevance of the Baumol mechanism and the validity of the estimated effect of political fragmentation on the two sectors considered herein.     

Did California Paid Family Leave Impact Infant Health?

The effects of paid parental leave policies on infant health have yet to be established. In this paper we investigate these effects by exploiting the introduction of California Paid Family Leave (PFL), the first program in the U.S. that specifically provides working parents with paid time off for bonding with a newborn. We measure health using the full census of infant hospitalizations in California and a set of control states, and implement a differences‐in‐differences approach. Our results suggest a decline in infant admissions, which is concentrated among those causes that are potentially affected by closer childcare (and to a lesser extent breastfeeding). Other admissions that are unlikely to be affected by parental leave do not exhibit the same pattern.     

Worth the Wait? The Effect of Early Term Birth on Maternal and Infant Health

Early term birth is defined as birth at 37 or 38 weeks gestation. While infants born early term are not considered premature, the medical literature suggests that they have an increased risk of serious adverse health outcomes compared to infants born at term (39 or 40 weeks). Despite these known harms, we document a rise in early term births in the United States from 1989 to the mid‐2000s, followed by a decline in recent years. We posit that the recent decline in early term births has been driven by changes in medical practice advocated by the American College of Obstetricians and Gynecologists, programs such as the March of Dimes’ “Worth the Wait” campaign, and by Medicaid policy. We first show that this pattern cannot be attributed to changes in the demographic composition of mothers, and provide some evidence that efforts to reduce early term elective deliveries (EEDs) through Medicaid policy were effective. We next exploit county‐level variation in the timing of these changes in medical practice to examine the effect of early term inductions (our proxy for EEDs) on infant and maternal health. We find that early term inductions lower birth weights and increase the risks of precipitous labor, birth injury, and required ventilation. Our results suggest that reductions in early term inductions can explain about one‐third of the overall increase in birth weights between 2010 and 2013 for births at 37 weeks gestation and above.     

Fiscal adjustments: do labor and product market institutions matter?

This paper investigates the role played by labor and product market institutions in determining the likelihood of initiating and of successfully concluding a fiscal adjustment. Using data for 16 OECD countries over the period 1970 to 2000, we find that a less generous unemployment benefit system—rather than temporary caps on spending (e.g., wage freezes)—contributes to the success of fiscal consolidation. Weaker forms of bargaining coordination and centralization facilitate the fiscal adjustment effort. On the other hand, product market deregulation and more flexible employment protection legislation do not contribute positively to fiscal consolidation.     

Emission Standards,Public Transit,and Infant Health

Transit buses are an integral part of urban life. They reduce externalities generated from private vehicles and increase geographic mobility. However, unlike most private vehicles in the United States, they use diesel fuel and emit higher amounts of toxic pollutants. The U.S. Environmental Protection Agency set emission standards for transit buses starting in 1988 that have been continually updated, but their public health and economic impacts are unclear due to scarce emissions data. I construct a novel panel dataset for the New York City (NYC) Transit bus fleet between 1990 and 2009 and examine the impact of bus pollution on infant health by using bus vintage as a proxy for emissions. I exploit the variation in vintage as older buses are retired and replaced with newer, lower‐emitting buses forced to adhere to stricter emission standards. I then assign maternal exposure to bus vintage at the census block level. Findings suggest that maternal exposure to the oldest, unregulated buses is associated with modest reductions in birth weight and gestational age relative to newer buses that abide by emissions policies. I then conduct a back‐of‐the‐envelope cost‐benefit calculation and find net economic benefits of $53.3 million resulting from improved emission standards for the 2009 birth cohort in NYC. Since the treatment in this study clearly maps to federal emissions policies, these results are the first to provide credible evidence that transit bus emission standards had a positive effect on infant health.     

Benefit adequacy among elderly Social Security retired-worker beneficiaries and the SSI federal benefit rate

Both target effectiveness and administrative simplicity are desirable properties in the design of minimum benefit packages for public retirement programs. The federal benefit rate (FBR) of the Supplemental Security Income (SSI) program has been proposed by some analysts as a potentially attractive basis of establishing a new minimum benefit for Social Security on both of these grounds. This type of proposal is related to a broader array of minimum benefit proposals that would establish a Social Security benefit floor based on the poverty rate. In contrast to Social Security, the SSI program is means tested, including both an income and asset screen and also a categorical eligibility screen (the requirement to qualify as aged or disabled). The SSI FBR provides an inflation-adjusted, guaranteed income floor for aged and disabled people with low assets. The FBR has been perceived by proponents as a minimal measure of Social Security benefit adequacy because it represents a subpoverty income level for a family of one or two depending on marital status. For this same reason it has been seen as a target-effective tool of designing a minimum Social Security benefit. An FBR-based minimum benefit has also been viewed as administratively simple to implement; the benefit can be calculated from Social Security administrative records using a completely automated electronic process. Therefore-in contrast to the SSI program itself-an FBR-based minimum benefit would incur virtually no ongoing administrative costs, would not require a separate application for a means-tested program, and would avoid the perception of welfare stigma. While these ideas have been discussed in the literature and among policymakers in the United States over the years, and similar proposals have been considered or implemented in several foreign countries, there have been no previous analyses measuring the size of the potentially affected beneficiary population. Nor has there been any systematic assessment of the FBR as a measure of benefit adequacy or the tradeoffs between potential target effectiveness and administrative simplicity. Based on a series of simulations, we assess the FBR as a potential foundation for minimum Social Security benefits and we examine the tradeoffs between administrative simplicity and target effectiveness using microdata from the 1996 panel of the Survey of Income and Program Participation (SIPP). Our empirical analysis is limited to Social Security retired-worker beneficiaries aged 65 or older. We start with the assessment of the FBR as a measure of benefit adequacy. We are particularly concerned about two types of error: (1) incorrectly identifying some Social Security beneficiaries as "economically vulnerable," and (2) incorrectly identifying others as "not economically vulnerable." Operationally we measure economic vulnerability by two alternative standards. One of our measures considers beneficiaries with family income below the official poverty threshold as vulnerable. Our second measure is more restrictive; it uses a family income threshold equal to 75 percent of the official poverty threshold. We find that a substantial minority of retired workers have Social Security benefits below the FBR. The results also show that the FBR-based measure of Social Security benefit adequacy is very imprecise in terms of identifying economically vulnerable people. We estimate that the vast majority of beneficiaries with Social Security benefits below the FBR are not economically vulnerable. Conversely, an FBR-level Social Security benefit threshold fails to identify some beneficiaries who are economically vulnerable. Thus an FBR-level minimum benefit would be poorly targeted in terms of both types of errors we are concerned about. An FBR-level minimum benefit would provide minimum Social Security benefits to many people who are clearly not poor. Conversely, an FBR-level minimum benefit would not provide any income relief to some who are poor. The administrative simplicity behind these screening errors also results in additional program cost that may be perceived as substantial. We estimate that an FBR-level minimum benefit would increase aggregate program cost for retired workers aged 65 or older by roughly 2 percent. There are two fundamental reasons for these findings. First, the concept of an FBR-level minimum benefit looks at the individual or married couple in artificial isolation; however, the family is the main consumption unit in our society. The income of an unmarried partner or family members other than a married spouse is ignored. Second, individuals and couples may also have income from sources other than Social Security or SSI, which is also ignored by a simple FBR-based minimum benefit concept. The substantial empirical magnitude of measurement error arising from these conceptual simplifications naturally leads to the assessment of the tradeoff between target effectiveness and administrative simplicity. To facilitate this analysis, we simulate the potential effect of alternative screening methods designed to increase target effectiveness; while reducing program cost, such alternatives also may increase administrative complexity. For example, considering the combined Social Security benefit of a married couple (rather than looking at the husband and wife in isolation) might substantially increase target effectiveness with a relatively small increase in administrative complexity. Adding a family income screen might increase administrative complexity to a greater degree, but also would increase target effectiveness dramatically. The results also suggest that at some point adding new screens-such as a comprehensive asset test-may drastically increase administrative complexity with diminishing returns in terms of increased target effectiveness and reduced program cost. Whether a broad-based minimum benefit concept that is not tied to previous work experience is perceived by policymakers as desirable or not may depend on several factors not addressed in this article. However, to the extent that this type of minimum benefit design is regarded as potentially desirable, the tradeoffs between administrative simplicity and target effectiveness need to be considered.     

The Impact of Prenatal Exposure to Power Plant Emissions on Birth Weight: Evidence from a Pennsylvania Power Plant Located Upwind of New Jersey

To examine the infant health impact of prenatal exposure to power plant emissions, we draw scientific evidence on the impacted region downwind of a large polluter, a coal‐fired power plant located on the border of two states and proven to be the sole contributor to the violation of air quality standards of the impacted region. Our results show that among all live singleton births that occurred during 1990 through 2006, those born to mothers living as far as 20 to 30 miles away downwind from the power plant (which is also an affluent region) during pregnancy are at greater risks of low birth weight (LBW) and very low birth weight (VLBW): the likelihoods of LBW and VLBW could increase approximately by 6.50 and 17.12 percent, respectively. In light of the continual efforts of The U.S. Environmental Protection Agency in reducing cross‐state air pollution caused by transboundary power plant emissions, our study is aimed at broadening the scope of cross‐border pollution impact analysis by taking into account adverse infant health effects of upwind polluters, which can impose disproportionate burdens of health risks on downwind states due to air pollutants transported by wind.     

Let's go outside: bodies,prostitutes, slaves and worker citizens

In liberal thought, slavery is imagined as reducing the human being to nothing but a body, while the free and equal political subjects of modern liberal democracies are held to be abstract, universal and disembodied individuals. In theory, bodies are also unimportant in the wage labour exchange. Though traditional models of worker citizenship insist on state and employers' duty to protect the human worth of worker citizens, they also assume the disembodied, thing-like nature of commodified labour power. Because bodies are so obviously important in the exchange between prostitute and customer, sex work is difficult to reconcile with liberal fictions of disembodiment, and one strand of feminist debate on prostitution is preoccupied by the question of whether prostitutes are like slaves or wage labourers. Protagonists on both sides of this debate often reproduce liberal understandings of labour power as a ‘thing’ that can be detached from the person. And yet labour power is also a contested commodity, and wage labour has historically been likened to slavery by activists struggling against the commodification of labour power. This article argues that stepping outside liberal fictions of disembodiment and recognising the parallels between prostitution, wage labour and slavery would allow greater scope for establishing a common political subjectivity amongst prostitutes, other wage workers and all those who have an interest in halting and reversing the current global trend towards the commodification of everything. In this way, common political ground between prostitutes and other wage workers is more visible when we step outside liberal assumptions about embodiment, slavery, work and citizenship.     

Public housing,health, and health behaviors: Is there a connection?

This paper explores the relationship between public housing, health outcomes, and health behaviors among low-income housing residents. While public housing can be a dangerous and unhealthy environment in which to live, the subsidized rent may free up resources for nutritious food and health care. In addition, public housing may be of higher quality than the available alternatives, it may provide easier access to health clinics willing to serve the poor, and it may link residents to social support networks, which can improve mental health and the ability to access higher-quality grocery stores. To test whether there is a "back-door" health benefit to the public housing program, we analyze data from the Fragile Families and Child Wellbeing Study. We minimize the effects of selection into public housing with controls and instrumental variables estimation and find that the results are somewhat sensitive to the instrumental variable used, and thus, we conclude that we are unable to detect a robust health benefit from public housing for our measures of health. However, we do find some evidence that public housing residency has mixed effects on domestic violence, increases obesity, and worsens mothers' overall health status.     

Revenue Cyclicality and Changes in Income and Policy

The past two recessions have proved alarming to state government finances. In 2001, a relatively shallow national recession led to a severe downturn in state revenues that took three years to unwind. In the wake of the recent economic downturn, signs of fiscal stress are readily apparent. In this paper, we investigate whether the revenue patterns surrounding these two recessions are the result of state government revenues having grown more sensitive to economic conditions. We find that the responsiveness of revenues to measures of business cycle conditions has grown since the 1990s. We use data on state government revenues, state‐specific information on economic conditions, and measures of state policy to examine fiscal performance and budgeting practice over the economic cycle. Our findings suggest that increasing income cyclicality, in particular of investment income, has made state revenues more responsive to the business cycle since the mid‐1990s. We also find that changes in policy making have served to increase revenue cyclicality.