Working Paper: NBER ID: w30075
Authors: Ekaterina S. Jardim; Mark C. Long; Robert Plotnick; Emma Van Inwegen; Jacob L. Vigdor; Hilary Wething
Abstract: The boundary discontinuity method of causal inference may yield misleading results if a policy’s impacts do not stop at the border of the implementing jurisdiction. We use geographically precise longitudinal employment data documenting worker job-to-job mobility to study policy spillovers in the context of three local minimum wage increases. Estimated spillover impacts on wages and hours are statistically significant, geographically diffuse, and sufficient to create concern regarding interpretation of results even using not-immediately-adjacent regions as controls. Spillover effects appear less concerning with smaller interventions or those or adopted in a smaller jurisdiction.
Keywords: minimum wage; policy spillover; boundary discontinuity
JEL Codes: J31; J61; R12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Boundary discontinuity method (C62) | Underestimation of local policy impacts (H79) |
| Local minimum wage increases in Seattle (J38) | Wages in adjacent Washington census tracts (J39) |
| Local minimum wage increases in Seattle (J38) | Hours worked in adjacent Washington census tracts (J39) |
| Local minimum wage increases in Seattle (J38) | Spillover effects in adjacent areas (R11) |
| Spillover effects (F69) | Wages in adjacent jurisdictions (J31) |
| Local minimum wage increases in Seattle (J38) | Spillover effects up to a 40-minute drive (R41) |