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Reconciling the evidence of Card and Krueger (1994) and Neumark and Wascher (2000)

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  • Olli Ropponen

Abstract

We employ the original Card and Krueger (1994) and Neumark and Wascher (2000) data together with the changes-in-changes (CIC) estimator to re-examine the evidence of the effect of minimum wages on employment. Our study reconciles the controversial positive average employment effect reported by the former study and the negative average employment effect reported by the latter study. Our main finding, which is supported by both datasets, is that the controversial result remains valid only for small fast-food restaurants. This finding is accompanied with a new possible explanation.
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Suggested Citation

  • Olli Ropponen, 2011. "Reconciling the evidence of Card and Krueger (1994) and Neumark and Wascher (2000)," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 26(6), pages 1051-1057, September.
    • Handle: RePEc:wly:japmet:v:26:y:2011:i:6:p:1051-1057
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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. Florian F Gunsilius, 2025. "A primer on optimal transport for causal inference with observational data," Papers 2503.07811, arXiv.org, revised Mar 2025.
    3. Rashmi Ahuja & Shrimoyee Ganguly & Rajat Acharyya & Sugata Marjit, 2024. "Labour-Market Reform, Skill-Based Exports and Employment: Some Unconventional Results Under Finite Change in General Equilibrium," CESifo Working Paper Series 11455, CESifo.
    4. Marius Berger & Bruno Lanz, 2020. "Minimum wage regulation in Switzerland: survey evidence for restaurants in the canton of Neuchâtel," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 156(1), pages 1-23, December.
    5. William Torous & Florian Gunsilius & Philippe Rigollet, 2021. "An Optimal Transport Approach to Estimating Causal Effects via Nonlinear Difference-in-Differences," Papers 2108.05858, arXiv.org, revised Mar 2024.
    6. Emre Akgunduz & Egbert Jongen & Paul P.M. Leseman & Janneke Plantenga, 2015. "Quasi-experimental evidence on the relation between child care subsidies and child care quality," CPB Discussion Paper 310, CPB Netherlands Bureau for Economic Policy Analysis.
    7. Emre Akgunduz & Egbert Jongen & Paul P.M. Leseman & Janneke Plantenga, 2015. "Quasi-experimental evidence on the relation between child care subsidies and child care quality," CPB Discussion Paper 310.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    8. Dale Belman & Paul Wolfson & Kritkorn Nawakitphaitoon, 2015. "Who Is Affected by the Minimum Wage?," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(4), pages 582-621, October.
    9. Olli Ropponen, 2014. "A note on the robustness of Card and Krueger (1994) and Neumark and Wascher (2000)," Empirical Economics, Springer, vol. 46(1), pages 307-316, February.
    10. Eerola, Essi & Lyytikäinen, Teemu, 2015. "On the role of public price information in housing markets," Regional Science and Urban Economics, Elsevier, vol. 53(C), pages 74-84.
    11. Florian Gunsilius, 2020. "Distributional synthetic controls," Papers 2001.06118, arXiv.org, revised Dec 2021.
    12. Riley, Rebecca & Rosazza Bondibene, Chiara, 2017. "Raising the standard: Minimum wages and firm productivity," Labour Economics, Elsevier, vol. 44(C), pages 27-50.
    13. F. F. Gunsilius, 2023. "Distributional Synthetic Controls," Econometrica, Econometric Society, vol. 91(3), pages 1105-1117, May.
    14. Y.E. Akgündüz & E. Jongen & Paul P M Leseman & J. Plantenga, 2015. "Quasi-experimental evidenceon the relationbetween child care subsidiesand child care quality," Working Papers 15-08, Utrecht School of Economics.

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