Three minimum wage papers walk into a bar...
A Cengiz, et al. (2019), Clemens and Strain (2021) and Callaway and Sant'anna (2021) explainer
Introduction
What is the effect of the minimum wage on labor markets? It mechanically raises the wages of employed workers at the bottom end of the wage distribution. But its effect on the overall employment of that group of workers has been debated by economists for decades. Given US states and the federal government regularly experiment with higher minimum wages, one would think economists would come to a consensus — especially given how many studies have been done on it. But the debate continues.
One of the things that makes this lack of consensus among economists about the empirical and historical effect of the minimum wage on employment even more curious is that minimum wages have often been opportunities to showcase ingenious causal research designs. Card and Krueger (1995) is considered a classic in labor economics, not only because it is was the seminal paper in the “new minimum wage” literature, but also because it was instrumental in making difference-in-differences rese…
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