Does Regional Variation in Wage Levels Identify the Effects of a National Minimum Wage?

Daniel Haanwinckel

No 35298, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper uses theory and extensive simulations to study two approaches that use regional wage differences to identify the effects of a national minimum wage: effective-minimum-wage designs, which measure exposure using contemporaneous local wages, and fraction-affected/ gap designs, which measure exposure before reform. I show that these designs can be unreliable in many plausible settings. A Brazilian case study shows that employment and wage-inequality estimates vary sharply across specifications, providing a plausible explanation for conflicting findings in the existing Brazilian literature. The paper concludes with practical recommendations for applied researchers and discusses how similar concerns may arise in other settings.

JEL-codes: C52 J08 J38 (search for similar items in EconPapers)
Date: 2026-06
New Economics Papers: this item is included in nep-inv, nep-lab and nep-lma
Note: LS
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Working Paper: Does regional variation in wage levels identify the effects of a national minimum wage? (2026)
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