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

Priya Ranjan (), David Neumark and Antonio Rodriguez-Lopez ()
Additional contact information
Priya Ranjan: University of California, Irvine
Antonio Rodriguez-Lopez: CESifo
Authors registered in the RePEc Author Service: Priyaranjan Jha

No 15282, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: 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.

Keywords: minimum wage; employment; commuting zones (search for similar items in EconPapers)
JEL-codes: J23 J38 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2022-05
New Economics Papers: this item is included in nep-int, nep-lma and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: What’s Across the Border? Re-Evaluating the Cross-Border Evidence on Minimum Wage Effects (2024)
Working Paper: What's Across the Border? Re-Evaluating the Cross-Border Evidence on Minimum Wage Effects (2022)
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