Pooling multiple case studies using synthetic controls: An application to minimum wage policies
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Arindrajit Dube, University of Massachusetts Amherst
Ben Zipperer, Washington Center for Equitable Growth
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.