Industrial Relations, January 2021.
Empirical work on the minimum wage typically estimates effects averaged across high- and low-wage areas. Low-wage labor markets could potentially be less able to absorb minimum wage increases, in turn leading to more negative employment effects. In this article, we examine minimum wage effects in low-wage counties, where relative minimum wage ratios reach as high as 0.82, well beyond the state-based ratios in extant studies. Using data from the American Community Survey, the Quarterly Workforce Indicators, and the Quarterly Census on Employment and Wages, we implement event study and difference-in-differences methods, estimating average causal effects for all events in our sample and separately for areas with lower and higher impacts. We find positive wage effects, especially in high-impact counties, but do not detect adverse effects on employment, weekly hours, or annual weeks worked. We do not find negative employment effects among women, Blacks, and/or Hispanics. In high-impact counties, we find substantial declines in household and child poverty. These results inform policy debates about providing exemptions to a $15 federal minimum wage in low-wage areas.
Journal of Health Economics, October 2020.
Do minimum wages and the earned income tax credit (EITC) mitigate rising “deaths of despair?” We leverage state variation in these policies over time to estimate event study and difference-in-differences models of deaths due to drug overdose, suicide, and alcohol-related causes. Our causal models find no significant effects on drug or alcohol-related mortality, but do find significant reductions in non-drug suicides. A 10 percent minimum wage increase reduces non-drug suicides among low-educated adults by 2.7 percent, and the comparable EITC figure is 3.0 percent. Placebo tests and event-study models support our causal research design. Increasing both policies by 10 percent would likely prevent a combined total of more than 700 suicides each year.