Occupational Structure, Low-Wage Establishments, and Public Policy

Awarded Scholars:
Eliza Forsythe, University of Illinois
Project Date:
Aug 2018
Award Amount:

State and local governments have recently enacted minimum wage legislation to raise wages at the bottom of the wage distribution. However, such policies may affect how low-wage employers compensate and staff their workforces, potentially leading to negative employment effects and spillovers throughout the firm and labor market. 

Economist Eliza Forsythe will examine the extent to which increases in the local minimum wage affect the wage and occupational structure of the local labor market and within establishments. She will use restricted-access establishment-level survey data from the Occupational Employment Statistics (OES) survey, a rotating survey of about 200,000 establishments conducted every six months by the Bureau of Labor Statistics. She will use a difference-in-differences estimation approach to compare local labor market-level outcomes for states and smaller geographic areas that increased the minimum wage between 1999 and 2016 compared with a synthetic control group that did not experience changes in the minimum wage during this period. She will then use a triple-difference matching approach, in which she compares below and above wage threshold establishments in states that increase the minimum wage with matched establishments in control states. 


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