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NJ and PA Once Again: What Happened to Employment When the PA–NJ Minimum Wage Differential Disappeared?

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  • Saul D Hoffman

    (Department of Economics, University of Delaware, Newark, DE 19716, USA.)

  • Diane M Trace

    (Department of Economics, University of Delaware, Newark, DE 19716, USA.)

Abstract

Card and Krueger's analysis of the impact of the 1992 increase in the New Jersey (NJ) state minimum wage on employment in fast-food restaurants in NJ and Pennsylvania (PA) is very well known. In 1996 and 1997, the federal minimum wage was increased from $4.25 to $5.15, thereby increasing the minimum wage by $0.90 in PA but by just $0.10 in NJ. We use CPS data to examine the impacts of this increase on employment of likely minimum wage workers in the two states, using DID and DIDID estimators that exploit within-state and between-state comparisons. We find consistent evidence that employment of “at-risk” groups was negatively affected in PA relative to other groups in PA and to comparable groups in NJ. Eastern Economic Journal (2009) 35, 115–128. doi:10.1057/eej.2008.1

Suggested Citation

  • Saul D Hoffman & Diane M Trace, 2009. "NJ and PA Once Again: What Happened to Employment When the PA–NJ Minimum Wage Differential Disappeared?," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 35(1), pages 115-128.
    • Handle: RePEc:pal:easeco:v:35:y:2009:i:1:p:115-128
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    Cited by:

    1. Bruce G. Carruthers & Naomi R. Lamoreaux, 2016. "Regulatory Races: The Effects of Jurisdictional Competition on Regulatory Standards," Journal of Economic Literature, American Economic Association, vol. 54(1), pages 52-97, March.
    2. David Neumark & Peter Shirley, 2021. "Myth or Measurement: What Does the New Minimum Wage Research Say about Minimum Wages and Job Loss in the United States?," NBER Working Papers 28388, National Bureau of Economic Research, Inc.

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