Following a minimum wage hike, spending increases more than income, and thus debt rises, in households with minimum wage workers. The size, as well as the timing, persistence, composition, and distribution of the spending response is inconsistent with the basic certainty equivalent life cycle...

We document two new facts about the market-level response to minimum wage hikes: firm exit and entry both rise. These results pose a puzzle: canonical models of firm dynamics predict that exit rises but that entry falls. We develop a model of firm dynamics based on putty-clay technology and show...

Following a minimum wage hike, household income rises on average by about $250 per quarter and spending by roughly $700 per quarter for households with minimum wage workers. Most of the spending response is caused by a small number of households who purchase vehicles. Furthermore, we find that...