Please use this identifier to cite or link to this item:
Aaronson, Daniel
Agarwal, Sumit
French, Eric
Year of Publication: 
Series/Report no.: 
Working Paper, Federal Reserve Bank of Chicago 2007-23
Following a minimum wage hike, spending increases more than income, and thus debt rises, in households with minimum wage workers. The size, as well as the timing, persistence, composition, and distribution of the spending response is inconsistent with the basic certainty equivalent life cycle model. However, the response is consistent with a model where households can borrow against part of the value of their durable goods.
Document Type: 
Working Paper

Files in This Item:
577.06 kB

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.