College
College of Business Administration
Date of Last Revision
2026-05-08 12:32:49
Major
Economics
Honors Course
Honors Project in Economics
Number of Credits
3
Degree Name
Bachelor of Arts
Date of Expected Graduation
Spring 2026
Abstract
This paper examines how increases in binding minimum wages affect various types of household debts and delinquency rates. Within this paper, household debt is defined as the combined sum of auto loans, credit card debt, mortgage debt, and student loan debt. The goal of the analysis is to conclude whether minimum wage increases are contributing to America’s growing debt crisis. The answer to this question likely relies on whether or not minimum wage increases cause unemployment. This is because unemployment can contribute significantly to debt levels when unemployed people rely on credit for day-to-day transactions or payments. Traditional economic theory supports the belief that minimum wage increases contribute to unemployment. Previous studies have often shown mixed results, indicating that this is a very complicated topic. Using panel data for all 50 states for the years 2003-2024, the analysis is conducted using a difference-in-differences technique with state and year fixed effects.
Research Sponsor
Sucharita Ghosh
First Reader
Ali Enami
Second Reader
Michael DeDad
Honors Faculty Advisor
Ali Enami
Proprietary and/or Confidential Information
No
Community Engaged Scholarship
No
Recommended Citation
Rader, Payton G., "The Effect of Minimum Wage on Household Debts and Delinquencies" (2026). Williams Honors College, Honors Research Projects. 2223.
https://ideaexchange.uakron.edu/honors_research_projects/2223