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What’s Across the Border? Re-Evaluating the Cross-Border Evidence on Minimum Wage Effects

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Listed:
  • Priyaranjan Jha
  • David Neumark
  • Antonio Rodriguez-Lopez

Abstract

Dube, Lester, and Reich (2010) argue that state-level minimum wage variation correlated with economic shocks generates spurious evidence that higher minimum wages reduce employment. Using minimum wage variation within contiguous county pairs sharing a state border, they find no relationship between minimum wages and employment in the U.S. restaurant industry. Using the same research design, we show that this result is overturned if we use instead multi-state commuting zones, which provide superior definitions of local economic areas. These contrasting results are explained by a positive bias in the county-pair specification when using pairs formed by counties from different commuting zones.

Suggested Citation

  • Priyaranjan Jha & David Neumark & Antonio Rodriguez-Lopez, 2024. "What’s Across the Border? Re-Evaluating the Cross-Border Evidence on Minimum Wage Effects," NBER Working Papers 32901, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32901
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    Cited by:

    1. Winters, John V., 2022. "Minimum Wages and Restaurant Employment for Teens and Adults in Metropolitan and Non-metropolitan Areas," IZA Discussion Papers 15499, Institute of Labor Economics (IZA).
    2. Arindrajit Dube & Attila S. Lindner, 2024. "Minimum Wages in the 21st Century," NBER Working Papers 32878, National Bureau of Economic Research, Inc.

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    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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