Pooling multiple case studies using synthetic controls: An application to minimum wage policies

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Authors:

Arindrajit Dube, University of Massachusetts Amherst
Ben Zipperer, Washington Center for Equitable Growth

Abstract:

We assess the employment and wage effects minimum wage increases between 1979 and 2013 by pooling 29 synthetic control case studies. Using the mean percentile rank, a simple, distribution-free method, we find a sizable, positive and statistically significant effect on the average teen wage. We also test for heterogeneous treatment effects using the distribution of estimated ranks, which has a known form, and detect heterogeneity in the wage elasticities, consistent with differential bites in the policy. In contrast, the employment estimates suggest a small constant effect not distinguishable from zero.