Credible Research Designs for Minimum Wage Studies

Arbeitspapier

We assess alternative research designs for minimum wage studies. States in the U.S. with larger minimum wage increases differ from others in business cycle severity, increased inequality and polarization, political economy, and regional distribution. The resulting time-varying heterogeneity biases the canonical two-way fixed effects estimator. We consider alternatives including border discontinuity designs, dynamic panel data models, and the synthetic control estimator. Results from four datasets and six approaches all suggest employment effects are small. Covariates are more similar in neighboring counties, and the synthetic control estimator assigns greater weights to nearby donors. These findings also support using local area controls.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 7638

Classification and Topics

• Classification: Wirtschaft ; Labor Economics Policies ; Labor Demand ; Wages, Compensation, and Labor Costs: Public Policy ; Monopsony; Segmented Labor Markets ; Labor Turnover; Vacancies; Layoffs ; Unemployment: Models, Duration, Incidence, and Job Search
• Subject: minimum wage ; youth employment ; border discontinuity ; policy evaluation

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Allegretto, Sylvia ; Dube, Arindrajit ; Reich, Michael ; Zipperer, Ben
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/89954
• Last update: 10.03.2025, 11:46 AM CET