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|Title:||The spending and debt response to minimum wage hikes|
|Citation:||Aaronson, D., Agarwal, S., French, E. (2012-12). The spending and debt response to minimum wage hikes. American Economic Review 102 (7) : 3111-3139. ScholarBank@NUS Repository. https://doi.org/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. Copyright © 2012 by the American Economic Association.|
|Source Title:||American Economic Review|
|Appears in Collections:||Staff Publications|
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