Are the Effects of Minimum Wage Increases Always Small? A Re-Analysis of Sabia, Burkhauser, and Hansen
In a recent article, Sabia, Burkhauser, and Hansen report very large negative employment effects of the 2004-2006 increase in the NY state minimum wage on young, less- educated workers. I re-examine their estimates using data from the full CPS, rather than the smaller MORG files they use. I find no evidence whatsoever of a negative employment impact. When the two data sources conflict, there can be no doubt that the full CPS, which is the source of official employment data, is the more appropriate. Furthermore, when I repeat their analysis using three states and the District of Columbia that also had a substantial increase in the state minimum wage, I find evidence of a small positive employment effect.
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