In the question about the minimum wage found here, I have heard several times that an increase in the minimum wage can, as one of several competing effects, "boost the economy" by increasing the income of some workers. Under what conditions could this happen, if at all? Are there any papers (peer-reviewed journal articles) out there that make this claim?
From the Chicago Federal Reserve:
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
Aaronson, D., S. Agarwal, and E. French (2011): "The Spending and Debt Responses to Minimum Wage Increases" Federal Reserve Bank of Chicago Working Paper, WP 2007-23.
To add a paper with a, in my opinion, better identification than cross-state fixed effects as added by charlotte's answer, here is Dube et al (2010 ReStat; paywall-free) - in my opinion the paper with the best identification and external validity out there.
They do first-difference in counties with different minimum wages and
find no adverse employment effects. We show that traditional approaches that do not account for local economic conditions tend to produce spurious negative effects due to spatial heterogeneities in employment trends that are unrelated tto minimum wage policies. Our findings are robust to allowing for long-term effects of minimum wage changes.
(emphasis mine). In contrast, they find that the elasticity of earnings (food sector) w.r.t. the minimum wages is consistently around $0.2$ for many different specifications.