When Good Measurement Goes Wrong

Joseph J. Sabia, Richard Burkhauser and Benjamin Hansen

ILR Review, 2016, vol. 69, issue 2, 312-319

Abstract: Hoffman’s (2015) replication of Sabia, Burkhauser, and Hansen (SBH 2012) suggests that “unlucky†measurement error in low-skilled employment in the Current Population Survey Outgoing Rotation Groups (CPS-ORG) led SBH to produce upwardly biased estimates of the labor demand effects of the 2005 to 2006 New York State minimum wage increase. This study replicates Hoffman’s preferred policy estimates from the full CPS and finds evidence that the parallel trends assumption underlying his difference-in-difference approach is violated. When a synthetic control state with pretreatment employment trends similar to those in New York is constructed, this study estimates a relatively large negative employment elasticity with respect to the minimum wage for low-skilled individuals (–0.5), similar to the estimate SBH obtained using the CPS-ORG (–0.6).

Keywords: minimum wage; employment; synthetic controls (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:ilrrev:v:69:y:2016:i:2:p:312-319

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