RT Journal Article
SR Electronic
T1 Beyond Labor Market Outcomes
JF Journal of Human Resources
JO J Hum Resour
FD University of Wisconsin Press
SP 0518-9524R2
DO 10.3368/jhr.58.1.0518-9524R2
A1 Cristian Alonso
YR 2020
UL http://jhr.uwpress.org/content/early/2020/06/30/jhr.58.1.0518-9524R2.abstract
AB How effective is the minimum wage at raising nondurable household consumption through the redistribution of income towards low-wage workers? To address this question, I use novel data on retail sales by county and exploit variation in the minimum wage rate across the U.S. and over time. I find that a 10 percent increase in the minimum wage raises sales by 0.6 percent in nominal terms and 0.4 percent in real terms. These large effects are suggestive of high marginal propensities to spend on nondurables out of minimum wage hikes. The expenditure response emerges even when exploiting only within-state variation.