There is no conflict of interest.
Highlights
- The study examined the impact of minimum wage increases on wage and employment outcomes.
- The study used a difference-in-difference design to compare outcomes in high- and low-impact counties. Using administrative data, the authors conducted statistical models to evaluate differences in outcomes.
- The study found that raising the minimum wage significantly increased the wages of individuals with a high school degree, those with less than a high school degree, and teenagers.
- This study receives a moderate evidence rating. This means we are somewhat confident that the estimated effects are attributable to increases in minimum wage, but other factors might also have contributed.
Intervention Examined
Features of the Study
The study used a difference-in-difference design to explore how minimum wage increases affect wages and employment in low-wage counties in the United States. Each state in the sample experienced at least one change in its minimum wage from 2004 to 2017. The authors categorized counties into high-impact and low-impact samples using the relative minimum wage and the bite (portion of workers earning less than the new minimum wage before the increase). High-impact areas had a relative minimum wage above 0.5 and low-impact areas had values below 0.5. A specific focus was placed on localities where the relative minimum wage was 0.6 or higher.
The study focused on individuals aged 16 to 70 with a high school education or less. The authors created a comparison group of individuals with a bachelor’s degree or higher. The authors used data from the American Community Survey, Quarterly Workforce Indicators, and the Quarterly Census of Employment and Wages. They conducted statistical models to assess the differences in outcomes, controlling for fixed effects for area and year, and relevant county and state-level variables.
Findings
Earnings and wages
- The study found that raising the minimum wage in high-impact areas significantly increased wages among individuals with a high school degree, those with less than a high school degree, and teenagers. No significant increase was found for individuals with a bachelor’s degree in high-impact or low-impact areas.
Employment
- The study did not find any statistically significant relationships between increasing the minimum wage in low-impact and high-impact areas and employment.
Considerations for Interpreting the Findings
Although the study was a well-implemented nonexperimental design it should be noted that the study was conducted during the early stages of the Great Recession. This may have influenced the results due to a decrease in job opportunities in the United States. Also, the authors consider p-values of less than 0.10 to be significant, though it is standard practice to consider results as statistically significant if the p-value is less than 0.05. Only results that demonstrate a p-value of less than 0.05 are considered statistically significant in this profile.
Causal Evidence Rating
Research Guidelines
Review Protocol: Living Systematic Annual Search and Review Protocol
Review Guidelines: Causal Evidence Guidelines