Read the box What Is the Effect on Employment of the Minimum Wage? in Section 13.4....
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Read the box "What Is the Effect on Employment of the Minimum Wage?" in Section 13.4. Suppose, for concreteness. that Card and Krueger collected their data in 1991 (before the change in the New Jersey minimum wage) and in 1993 (after the change in the New Jersey minimum wage). Consider Equation (13.7) with the W regressors excluded. a. What is the value of Xit. G₁, and D, for: i. A New Jersey restaurant in 1991? ii. A New Jersey restaurant in 1993? iii. A Pennsylvania restaurant in 1991? iv. A Pennsylvania restaurant in 1993? b. In terms of the coefficients Bo. B₁, B₂ and 33, what is the expected number of employees in: i. A New Jersey restaurant in 1991? ii. A New Jersey restaurant in 1993? iii. A Pennsylvania restaurant in 1991? iv. A Pennsulvania restaurant in 1993? c. In terms of the coefficients Bo. B1, B2 and 3, what is the average causal effect of the minimum wage on employment? d. Explain why Card and Krueger used a differences-in-differences estimator of the causal effect instead of the "New Jersey after-New Jersey before** differences estimator or the "1993 New Jersey-1993 Pennsylvania" differences estimator. Read the box "What Is the Effect on Employment of the Minimum Wage?" in Section 13.4. Suppose, for concreteness. that Card and Krueger collected their data in 1991 (before the change in the New Jersey minimum wage) and in 1993 (after the change in the New Jersey minimum wage). Consider Equation (13.7) with the W regressors excluded. a. What is the value of Xit. G₁, and D, for: i. A New Jersey restaurant in 1991? ii. A New Jersey restaurant in 1993? iii. A Pennsylvania restaurant in 1991? iv. A Pennsylvania restaurant in 1993? b. In terms of the coefficients Bo. B₁, B₂ and 33, what is the expected number of employees in: i. A New Jersey restaurant in 1991? ii. A New Jersey restaurant in 1993? iii. A Pennsylvania restaurant in 1991? iv. A Pennsulvania restaurant in 1993? c. In terms of the coefficients Bo. B1, B2 and 3, what is the average causal effect of the minimum wage on employment? d. Explain why Card and Krueger used a differences-in-differences estimator of the causal effect instead of the "New Jersey after-New Jersey before** differences estimator or the "1993 New Jersey-1993 Pennsylvania" differences estimator.
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Accounting
ISBN: 978-1118608227
9th edition
Authors: Lew Edwards, John Medlin, Keryn Chalmers, Andreas Hellmann, Claire Beattie, Jodie Maxfield, John Hoggett
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