What's across the Border? Re-Evaluating the Cross-Border Evidence on Minimum Wage Effects

Arbeitspapier

Dube, Lester, and Reich (2010) argue that state-level minimum wage variation can be correlated with economic shocks, generating spurious evidence that higher minimum wages reduce employment. Using minimum wage variation within contiguous county pairs that share a state border, they find no relationship between minimum wages and employment in the U.S. restaurant industry. We show that this finding hinges critically on using cross-border counties to define local economic areas with which to control for economic shocks that are potentially correlated with minimum wage changes. We use, instead, multi-state commuting zones, which provide superior definitions of local economic areas. Using the same within-local area research design—but within cross-border commuting zones—we find a robust negative relationship between minimum wages and employment.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 15282

Classification and Topics

• Classification: Wirtschaft ; Labor Demand ; Wages, Compensation, and Labor Costs: Public Policy
• Subject: minimum wage ; employment ; commuting zones

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Jha, Priyaranjan ; Neumark, David ; Rodriguez-Lopez, Antonio
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2022

Further information

• Handle: http://hdl.handle.net/10419/263498
• Last update: 10.03.2025, 11:42 AM CET