findings:small impact on inequality of income signals bad programme targeting; significant reduction in poverty measures for sole parents already in employment only, but insignificant for sole parents overall
A study using a microsimulation to estimate the effects of a minimum wage increase in New Zealand on overall income inequality and further disaggregations along gender and poverty lines.
It finds limited redistributional effects for the policy, with negligible impact on overall income inequality and the possibility of actually increasing inequalities among lower percentile income households.
Additionally, while it finds a significant reduction in some poverty measures for sole parents that are in employment, when looking at sole parents overall the effects become insignificant again.
The authors suggest this points to bad programme targeting, which at best has negligible positive impact on income equality and at worst worsens income inequality in lower income households, due to may low-wage earners being the secondary earners of higher-income households but low-wage households often having no wage earners at all.
A pertinent limitation of the study includes its large sample weights possibly biasing the impacts on specific groups such as sole parents and thus being careful not to overestimate their significance.
