May 03, 2012 | Research Report
  • Type of publication: Research Report
  • Research or In The Media: Research
  • Research Area: Labor Markets, Wages & Poverty
  • Publication Date: 2012-05-03
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  • Authors:
    • Add Authors: Jeannette Wicks-Lim
    • Add Authors: Robert Pollin
  • Show in Front Page Modules: Yes

The minimum wage and Earned Income Tax Credit (EITC) are two major policies in the United States aimed at improving living standards for low-income workers and their families. These two policies are frequently presented as substitutes, or even in competition with one another, because of the differences in their approaches. This study explores an alternative view: that the minimum wage and EITC work most effectively in tandem, generating greater benefits for low-income workers than is possible when each measure operates alone. The authors examine evidence from between 1997 and 2007 on a state-by-state basis, focusing on conditions for single mothers with a high school degree or less. They find that: both the minimum wage and EITC are associated with higher employment levels; and the minimum wage and EITC strengthen each other

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