On the Robustness of Minimum Wage Effects: Geographically-Disparate Trends and Job Growth Equations

John Addison, McKinley Blackburn () and Chad Cotti

No 8420, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Just as the standard two-way fixed effects model for estimating the impact of minimum wages on employment has been sharply criticized for its neglect of spatial heterogeneity so, too, have the latest models been attacked for their uncritical use of state- or county-specific linear trends (and other spatial counterfactuals). Further attenuation of the effects of policy is also alleged to obtain in such circumstances where the true effect of minimum wages is upon employment growth rather than levels. This paper investigates whether such considerations call into question our earlier findings of statistically insignificant employment effects for an archetypal low-wage sector. We report that a continued focus on employment levels is indicated and that while experimentation with nonlinear trends may be productive their use is unlikely to dislodge the finding of considerably reduced negative employment effects.

Keywords: employment change; employment; minimum wages; spatial controls (search for similar items in EconPapers)
JEL-codes: J23 J38 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2014-08
New Economics Papers: this item is included in nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published - published in: IZA Journal of Labor Economics, 2015, 4, 1-16.

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Related works:
Journal Article: On the robustness of minimum wage effects: geographically-disparate trends and job growth equations (2015)
Working Paper: On the Robustness of Minimum Wage Effects: Geographically-Disparate Trends and Job Growth Equations (2014)
Working Paper: On the Robustness of Minimum Wage Effects: Geographically-Disparate Trends and Job Growth Equations (2014)
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