Minimum wages and the economic well-being of single mothers

Using pooled cross-sectional data from the 1992 to 2005 March Current Population Survey (CPS), this study examines the relationship between minimum wage increases and the economic well-being of single mothers. Estimation results show that minimum wage increases were ineffective at reducing poverty among single mothers. Most working single mothers were not affected by minimum wage hikes because they already earned wages above state and federal minimum wages. And less-educated single mothers who were affected did not see a rise in net income because of negative employment and hours effects. For this low-skilled population, a 10 percent increase in the minimum wage was associated with an 8.8 percent reduction in employment and an 11.8 percent reduction in annual hours worked. (C) 2008 by the Association for Public Policy Analysis and Management.