Restaurant Employment, Minimum Wages, and Border Discontinuities

Arindrajit Dube, Michael Reich, Akash Bhatt and Denis Sosinskiy

No 32902, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Dube, Lester and Reich (2010), using cross-state border county pairs (BCPs), did not detect restaurant employment losses from higher minimum wages. Jha, Neumark and Rodriguez- Lopez (2024, JNR), using multi-state commuting zones (MSCZs), do find disemployment effects. However, JNR’s results are confounded by 1990s-era parallel trends violations amplified by the two-way-fixed-effects (TWFE) model, which is also unreliable for detecting such violations. With post-2000 data, JNR’s specification does not indicate substantial disemployment. BCPs are much less affected by such pre-trends than MSCZs. Importantly, modern event study designs (using either MSCZs or BCPs) show no local pre-tends, and find no meaningful employment decline.

JEL-codes: J20 J39 J88 (search for similar items in EconPapers)
Date: 2024-09
New Economics Papers: this item is included in nep-inv, nep-ipr, nep-lab and nep-ure
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