Eastern Economic Journal

, Volume 35, Issue 1, pp 115–128

NJ and PA Once Again: What Happened to Employment When the PA–NJ Minimum Wage Differential Disappeared?

  • Saul D Hoffman
  • Diane M Trace
Article

Abstract

Card and Krueger's analysis of the impact of the 1992 increase in the New Jersey (NJ) state minimum wage on employment in fast-food restaurants in NJ and Pennsylvania (PA) is very well known. In 1996 and 1997, the federal minimum wage was increased from $4.25 to $5.15, thereby increasing the minimum wage by $0.90 in PA but by just $0.10 in NJ. We use CPS data to examine the impacts of this increase on employment of likely minimum wage workers in the two states, using DID and DIDID estimators that exploit within-state and between-state comparisons. We find consistent evidence that employment of “at-risk” groups was negatively affected in PA relative to other groups in PA and to comparable groups in NJ.

Keywords

minimum wage Card–Krueger 

JEL Classifications

J010 J080 J780 

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Copyright information

© Eastern Economic Association 2009

Authors and Affiliations

  • Saul D Hoffman
    • 1
  • Diane M Trace
    • 1
  1. 1.Department of EconomicsUniversity of DelawareNewarkUSA

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