What’s Across the Border? Re-Evaluating the Cross-Border Evidence on Minimum Wage Effects

Priyaranjan Jha, David Neumark and Antonio Rodriguez-Lopez

No 32901, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Dube, Lester, and Reich (2010) argue that state-level minimum wage variation correlated with economic shocks generates spurious evidence that higher minimum wages reduce employment. Using minimum wage variation within contiguous county pairs sharing a state border, they find no relationship between minimum wages and employment in the U.S. restaurant industry. Using the same research design, we show that this result is overturned if we use instead multi-state commuting zones, which provide superior definitions of local economic areas. These contrasting results are explained by a positive bias in the county-pair specification when using pairs formed by counties from different commuting zones.

JEL-codes: J23 J38 (search for similar items in EconPapers)
Date: 2024-09
New Economics Papers: this item is included in nep-int, nep-inv, nep-lma and nep-ure
Note: LS PE
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Related works:
Working Paper: What's Across the Border? Re-Evaluating the Cross-Border Evidence on Minimum Wage Effects (2022)
Working Paper: What's across the Border? Re-Evaluating the Cross-Border Evidence on Minimum Wage Effects (2022)
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