cite: Alinaghi2020
author: Alinaghi, N., Creedy, J., & Gemmell, N.
year: 2020
title: "The redistributive effects of a minimum wage increase in New Zealand: A microsimulation analysis"
publisher: Australian Economic Review
uri: https://doi.org/10.1111/1467-8462.12381
pubtype: article
discipline: economics

country: New Zealand
period: 2012-2013
maxlength:
targeting: implicit
group:
data: New Zealand Household Economic Survey (HES)

design: simulation
method: microsimulation model; uses Atkinson index
sample: 3500
unit: individual
representativeness: national
causal: 0 # 0 correlation / 1 causal

theory:
limitations: large sample weights may bias specific groups, e.g. sole parents
observation:
  - intervention: minimum wage
    institutional: 1
    structural: 1
    agency: 0
    inequality: income
    type: 0 # 0 vertical / 1 horizontal
    indicator: 1 # 0 absolute / 1 relative
    measures: Atkinson index
    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
    channels: many low-wage earners are secondary earners in higher income households; low-wage households often have no wage earners at all
    direction: -1 # -1 neg / 0 none / 1 pos
    significance: 0 # 0 nsg / 1 msg / 2 sg

notes:
annotation: |
  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.