Political Variables as Instruments for the Minimum Wage
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Sara Lemos
A number of recent empirical studies have found no evidence that the minimum wage adversely affects employment. Explanations for such non-negative estimates include new theoretical approaches, empirical identification and data issues. In this paper we examine the robustness of such estimates to concerns about bias arising from the simultaneous determination of employment and the minimum wage. We use a number of novel political variables as instruments to control for this source of endogeneity. We exploit the personal characteristics of the politicians voting on minimum wage bills, their voting behavior and their electoral process. Our main conclusion is that the weak relationship between minimum wages and employment does not appear to be driven by endogeneity.
©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston
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Artikel in diesem Heft
- Contributions Article
- Cash Constraints and Business Start-Ups: Deutschmarks Versus Dollars
- On-the-Job Learning, Firing Costs and Employment
- The Effect of the Nonprofit Motive on Hospital Competitive Behavior
- Electoral Competition and Redistribution with Rationally Informed Voters
- The Environmental Kuznets Curve: Exploring a Fresh Specification
- Uncertain R&D and the Porter Hypothesis
- Do Economists Recognize an Opportunity Cost When They See One? A Dismal Performance from the Dismal Science
- A Theory of Health Disparities and Medical Technology
- Entry-Level Products with Consumer Learning
- A Test for Collusion between a Bidder and an Auctioneer in Sealed-Bid Auctions
- Fatalistic Tendencies: An Explanation of Why People Don't Save
- Adjustment Costs and Irreversibility as Determinants of Investment: Evidence from African Manufacturing
- An Index For Venture Capital, 1987-2003
- Environmental Information Provision as a Public Policy Instrument
- Competition Policy and Exit Rates: Evidence from Switzerland
- Political Variables as Instruments for the Minimum Wage
