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A note on the robustness of Card and Krueger (1994) and Neumark and Wascher (2000)

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  • Olli Ropponen

Abstract

This note adds to the discussion originating from Card and Krueger (Am Econ Rev 84:772–793, 1994 ) and Neumark and Wascher (Am Econ Rev 90:1362–1396, 2000 ) by re-evaluating their results using the semiparametric difference-in-differences estimator introduced in Abadie (Rev Econ Stud 72:1–19, 2005 ). The note addresses the question of whether the differences in the original datasets can explain the differences in their conclusions. Although we observe heterogenous employment effects together with the differences in the distributions, the results show that the original findings on the overall employment effect of a minimum wage are fairly robust and just slightly changed when the differences in the distributions of the observed covariates are taken into account. Copyright Springer-Verlag Berlin Heidelberg 2014

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  • 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.
    • Handle: RePEc:spr:empeco:v:46:y:2014:i:1:p:307-316
    DOI: 10.1007/s00181-012-0663-4
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    1. 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.
    2. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-793, September.
    3. William Wascher & David Neumark, 2000. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Comment," American Economic Review, American Economic Association, vol. 90(5), pages 1362-1396, December.
    4. Alberto Abadie, 2005. "Semiparametric Difference-in-Differences Estimators," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(1), pages 1-19.
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    Cited by:

    1. 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.

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    More about this item

    Keywords

    Employment; Minimum wage; Nonlinear treatment effect models;
    All these keywords.

    JEL classification:

    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. A note on the robustness of Card and Krueger (1994) and Neumark and Wascher (2000) (Emp Econ 2014) in ReplicationWiki

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