Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/104981
Year of Publication: 
2014
Series/Report no.: 
IZA Policy Paper No. 86
Publisher: 
Institute for the Study of Labor (IZA), Bonn
Abstract: 
Minimum wage increases are not a very effective mechanism for reducing poverty. They are not related to decreases in poverty rates. They can cost some low-income workers their jobs. And most minimum wage earners who gain from a higher minimum wage do not live in poor (or near-poor) families. A better tool for reducing poverty, and at lower cost, is the earned income tax credit. It is a much more targeted way to provide income to workers in poor families. It raises the wages of only workers in low-income families and rises with the number of dependent children in a family.
Subjects: 
minimum wage
earned income tax credit
working poor
JEL: 
J31
J41
J42
Document Type: 
Working Paper

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