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Modern Difference-in-Differences, Same Old Answer: What Event-Study Estimates Really Tell Us About the Effects of Minimum Wages on Jobs

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  • David Neumark
  • Antonio Rodriguez-Lopez

Abstract

Two prominent publications in the recent minimum wage literature argue that estimation of the employment effects of minimum wages should use "clean" event-study designs, and that doing so leads to the conclusion that minimum wages have very limited, if any, effects on employment. We explore the use of event-study designs in this context, using the event-study stacked design of Cengiz, Dube, Lindner and Zipperer (2019a) and the related local projections difference-in-differences approach in Dube and Lindner (2024), along with their same data sources and period coverage. We generally find negative and significant employment effects of minimum wages in the United States, both overall and - more strongly - in the restaurant industry. The null results in these two papers are fragile and depend critically on a number of choices regarding variables, events, sample definitions, and weighting; they are not attributable to using an event-study design.

Suggested Citation

  • David Neumark & Antonio Rodriguez-Lopez, 2026. "Modern Difference-in-Differences, Same Old Answer: What Event-Study Estimates Really Tell Us About the Effects of Minimum Wages on Jobs," CESifo Working Paper Series 12791, CESifo.
    • Handle: RePEc:ces:ceswps:_12791
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    References listed on IDEAS

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    1. Lordan, Grace & Neumark, David, 2018. "People versus machines: The impact of minimum wages on automatable jobs," Labour Economics, Elsevier, vol. 52(C), pages 40-53.
    2. Priyaranjan Jha & Antonio Rodriguez-Lopez, 2021. "Minimum Wage and Employer Variety," CESifo Working Paper Series 9312, CESifo.
    3. David Neumark & William Wascher, 1992. "Employment Effects of Minimum and Subminimum Wages: Panel Data on State Minimum Wage Laws," ILR Review, Cornell University, ILR School, vol. 46(1), pages 55-81, October.
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    Keywords

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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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