Abstract
Over the three decades prior to the onset of the Great Recession in 2007, the
income share of the top 1% in the United States rose by over 150% (from 9.3% to
23.5%). During the same period, the real federal minimum wage fell by about 35%
(from $8.92 to $5.76 in 2011 dollars). This paper uses a comprehensive panel of
U.S. states to explore the effect of changes in the real minimum wage on top income
shares. Our findings indicate that the relationship between is negative in nature, but
not robust to small changes in the econometric specification or in the measurement
of inequality.
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