Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/70516 
Year of Publication: 
2008
Series/Report no.: 
Working Paper No. 2007-23
Publisher: 
Federal Reserve Bank of Chicago, Chicago, IL
Abstract: 
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

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