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Restaurant Employment, Minimum Wages, and Border Discontinuities

Author

Listed:
  • Arindrajit Dube
  • Michael Reich
  • Akash Bhatt
  • Denis Sosinskiy

Abstract

Dube, Lester and Reich (2010), using cross-state border county pairs (BCPs), did not detect restaurant employment losses from higher minimum wages. Jha, Neumark and Rodriguez- Lopez (2024, JNR), using multi-state commuting zones (MSCZs), do find disemployment effects. However, JNR’s results are confounded by 1990s-era parallel trends violations amplified by the two-way-fixed-effects (TWFE) model, which is also unreliable for detecting such violations. With post-2000 data, JNR’s specification does not indicate substantial disemployment. BCPs are much less affected by such pre-trends than MSCZs. Importantly, modern event study designs (using either MSCZs or BCPs) show no local pre-tends, and find no meaningful employment decline.

Suggested Citation

  • Arindrajit Dube & Michael Reich & Akash Bhatt & Denis Sosinskiy, 2024. "Restaurant Employment, Minimum Wages, and Border Discontinuities," NBER Working Papers 32902, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32902
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    More about this item

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J39 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Other
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy

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