Credible Research Designs for Minimum Wage Studies

Sylvia Allegretto (), Arindrajit Dube, Michael Reich () and Ben Zipperer
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Sylvia Allegretto: University of California, Berkeley
Michael Reich: University of California, Berkeley

No 7638, IZA Discussion Papers from IZA Network @ LISER

Abstract: 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.

Keywords: minimum wage; youth employment; border discontinuity; policy evaluation (search for similar items in EconPapers)
JEL-codes: J08 J23 J38 J42 J63 J64 (search for similar items in EconPapers)
Pages: 81 pages
Date: 2013-09
New Economics Papers: this item is included in nep-lab and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (84)

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Related works:
Journal Article: Credible Research Designs for Minimum Wage Studies (2017)
Working Paper: Credible Research Designs for Minimum Wage Studies (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp7638

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