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What’s Across the Border? Re-Evaluating the Cross-Border Evidence on Minimum Wage Effects

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Listed:
  • Priyaranjan Jha
  • David Neumark
  • Antonio Rodriguez-Lopez

Abstract

Dube, Lester, and Reich (2010) argue that state-level minimum wage variation correlated with economic shocks generates spurious evidence that higher minimum wages reduce employment. Using minimum wage variation within contiguous county pairs sharing a state border, they find no relationship between minimum wages and employment in the U.S. restaurant industry. Using the same research design, we show that this result is overturned if we use instead multi-state commuting zones, which provide superior definitions of local economic areas. These contrasting results are explained by a positive bias in the county-pair specification when using pairs formed by counties from different commuting zones.

Suggested Citation

  • Priyaranjan Jha & David Neumark & Antonio Rodriguez-Lopez, 2024. "What’s Across the Border? Re-Evaluating the Cross-Border Evidence on Minimum Wage Effects," NBER Working Papers 32901, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32901
    Note: LS PE
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    References listed on IDEAS

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    1. Sylvia Allegretto & Arindrajit Dube & Michael Reich & Ben Zipperer, 2017. "Credible Research Designs for Minimum Wage Studies," ILR Review, Cornell University, ILR School, vol. 70(3), pages 559-592, May.
    2. repec:cdl:indrel:qt1x99m65f is not listed on IDEAS
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    More about this item

    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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