Household Spending by income and minimum wage


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    IMPLAN Support

    Thomas, Thank you for your post! IMPLAN is an I-O Model and one of the limitations of the modeling method is that I-O models are fixed price (and wage) models. This may be why you have seen more REMI users doing this type of impact, as REMI includes that ability to apply price elasticities (albeit dependent on their underlying assumptions about elasticities.) To some degree you can do something similar with IMPLAN but to get a full scale of the picture you have to consider a potential of several Modeling problems and potential outcomes. For example, how will businesses behave if there is a minimum wage increase. Likely it will impact their behavior as many business will try to adjust their processes to reduce labor costs as a response to increased wage payments. Thus an increase in minimum wage may not result in an expected influx of labor payments to the economy. Thanks!

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