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Minimum Wage Effects Across State Borders: Estimates Using Contiguous Counties

Arindrajit Dube; T. William Lester¹; Michael Reich²

¹ Department of City and Regional Planning of UNCChapel Hill · ² University of California, Berkeley

We use policy discontinuities at state borders to identify the effects of minimum wages on earnings and employment in restaurants and other low-wage sectors. Our approach generalizes the case study method by considering all local differences in minimum wage policies between 1990 and 2006. We compare all contiguous county pairs in the United States that straddle a state border and find no adverse employment effects. We show that traditional approaches that do not account for local economic conditions tend to produce spurious negative effects due to spatial heterogeneities in employment trends that are unrelated to minimum wage policies. Our findings are robust to allowing for long-term effects of minimum wage changes.

DOI

10.1162/rest_a_00039

Volume

92 (4)

Pages

945-964

Language

en

Export

BibTeX

Sources

crossref openalex