When good measurement goes wrong: new evidence that New York state's minimum wage reduced employment
Sabia, Joseph J. ; Burkhauser, Richard V. ; Hansen, Benjamin
2016
69
2
March
312-319
employment ; minimum wage ; unskilled worker
Wages and wage payment systems
http://dx.doi.org/10.1177/0019793915610557
English
Bibliogr.
"Hoffman's (2015) replication of Sabia, Burkhauser, and Hansen (SBH 2012) suggests that “unlucky” measurement error in low-skilled employment in the Current Population Survey Outgoing Rotation Groups (CPS-ORG) led SBH to produce upwardly biased estimates of the labor demand effects of the 2005 to 2006 New York State minimum wage increase. This study replicates Hoffman's preferred policy estimates from the full CPS and finds evidence that the parallel trends assumption underlying his difference-in-difference approach is violated. When a synthetic control state with pretreatment employment trends similar to those in New York is constructed, this study estimates a relatively large negative employment elasticity with respect to the minimum wage for low-skilled individuals (–0.5), similar to the estimate SBH obtained using the CPS-ORG (–0.6)."
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