Published: DANIEL COOPER & MARÍA JOSÉ LUENGO‐PRADO & JONATHAN A. PARKER, 2020. "The Local Aggregate Effects of Minimum Wage Increases," Journal of Money, Credit and Banking, vol 52(1), pages 5-35. citation courtesy of
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Using variation in minimum wages across cities and controlling for differences in business-cycle factors and long-run local economic trends, we find that following minimum wage increases, both prices and nominal spending rise modestly. These gains are larger for certain sub-categories of goods such as food away from home and in locations where low-wage workers are a larger share of employment. Further, minimum wage increases are associated with reduced total debt among households with low credit scores, higher auto debt, and increased access to credit.