This setting lets you change the way you view articles. You can choose to have articles open in a dialog window, a new tab, or directly in the same window.
Open in Dialog
Open in New Tab
Open in same window

American Economic Review: Vol. 102 No. 7 (December 2012)

Expand

Quick Tools:

Print Article Summary
Export Citation
Sign up for Email Alerts Follow us on Twitter

Explore:

AER - All Issues

AER Forthcoming Articles

The Spending and Debt Response to Minimum Wage Hikes

Article Citation

Aaronson, Daniel, Sumit Agarwal, and Eric French. 2012. "The Spending and Debt Response to Minimum Wage Hikes." American Economic Review, 102(7): 3111-39.

DOI: 10.1257/aer.102.7.3111

Abstract

Immediately following a minimum wage hike, household income rises on average by about $250 per quarter and spending by roughly $700 per quarter for households with minimum wage workers. Most of the spending response is caused by a small number of households who purchase vehicles. Furthermore, we find that the high spending levels are financed through increases in collateralized debt. Our results are consistent with a model where households can borrow against durables and face costs of adjusting their durables stock. (JEL D12, D14, D91, J38)

Article Full-Text Access

Full-text Article

Additional Materials

Online Appendix (162.06 KB) | Download Data Set (547.78 MB)

Authors

Aaronson, Daniel (Federal Reserve Bank of Chicago)
Agarwal, Sumit (National U Singapore)
French, Eric (Federal Reserve Bank of Chicago)

JEL Classifications

D12: Consumer Economics: Empirical Analysis
D14: Personal Finance
D91: Intertemporal Consumer Choice; Life Cycle Models and Saving
J38: Wages, Compensation, and Labor Costs: Public Policy


American Economic Review


Quick Tools:

Sign up for Email Alerts

Follow us on Twitter

Subscription Information
(Institutional Administrator Access)

Explore:

AER - All Issues

AER - Forthcoming Articles

Virtual Field Journals


AEA Member Login:


AEAweb | AEA Journals | Contact Us