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Local minimum wage laws, boundary discontinuity methods, and policy spillovers

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  • Jardim, Ekaterina
  • Long, Mark C.
  • Plotnick, Robert
  • Vigdor, Jacob
  • Wiles, Emma

Abstract

We use geographically precise longitudinal employment data documenting worker job-to-job mobility to study policy spillovers in the context of three local minimum wage increases. Estimated spillover impacts on wages and hours are statistically significant, geographically diffuse, and sufficient to create concern regarding interpretation of results even using not-immediately-adjacent regions as controls. Spillover effects appear less concerning with smaller interventions or those adopted in smaller jurisdictions. The boundary discontinuity method of causal inference may yield misleading results if a policy’s impacts do not stop at the border of the implementing jurisdiction.

Suggested Citation

  • Jardim, Ekaterina & Long, Mark C. & Plotnick, Robert & Vigdor, Jacob & Wiles, Emma, 2024. "Local minimum wage laws, boundary discontinuity methods, and policy spillovers," Journal of Public Economics, Elsevier, vol. 234(C).
    • Handle: RePEc:eee:pubeco:v:234:y:2024:i:c:s0047272724000677
    DOI: 10.1016/j.jpubeco.2024.105131
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    More about this item

    Keywords

    Minimum wage; Boundary discontinuity; Policy spillovers;
    All these keywords.

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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