Minimum Wages and Employment¶
Card, D., & Krueger, A. (1994). Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania. American Economic Review, 84(4), 772-793.
Cited by¶
8 citations across 8 artifacts.
Each citation links to the sentence it supports in the citing article.
Primes¶
- Comparative Statics
- Engineering trade studies. Solve a system of equilibrium equations (mechanical, thermal, electrical) at a design point, perturb a component specification, and re-solve for the new operating point; trade-study tables are literal comparative-statics outputs. Operations research and supply-chain design. Increase the lead time by a day, hold the demand distribution fixed, and re-compute the optimal base-stock level; the new policy is the new equilibrium. Policy analysis. Raise a minimum wage, assume the labour market re-clears, and read off the projected changes in employment, labour cost, and prices
This sourceEmpirical study challenging the standard comparative-statics prediction that a minimum-wage rise lowers employment; found no employment reduction relative to Pennsylvania. (
Supported in partVerified against the work's full text
Card and Krueger set out the standard competitive-model prediction that a minimum-wage rise lowers employment and raises prices, then test it empirically.
“A standard competitive model predicts that establishment-level employment will fall if the wage is exogenously raised. For an entire industry, total employment is predicted to fall andproduct price is predicted to rise in response to an increase in a binding minimum wage.”
- Engineering trade studies. Solve a system of equilibrium equations (mechanical, thermal, electrical) at a design point, perturb a component specification, and re-solve for the new operating point; trade-study tables are literal comparative-statics outputs. Operations research and supply-chain design. Increase the lead time by a day, hold the demand distribution fixed, and re-compute the optimal base-stock level; the new policy is the new equilibrium. Policy analysis. Raise a minimum wage, assume the labour market re-clears, and read off the projected changes in employment, labour cost, and prices
- Counterfactual Subtraction
- Causal inference: placebo-subtracted treatment effect in randomised trials; difference-in-differences (a parallel-control unit's time-change subtracted); synthetic control (a weighted-control composite subtracted); regression adjustment (a conditional-mean subtracted); event studies (a pre-shock baseline subtracted).
This sourceCanonical difference-in-differences study using a parallel control group's (Pennsylvania) time-change as the subtracted counterfactual baseline for New Jersey.
Supported in partVerified against the work's full text
Card and Krueger use Pennsylvania stores as a control and report a difference-in-differences estimate, but cover none of the other listed methods.
“The relative gain (the "difference in differences" of the changes in employment) is 2.76 FTE employees (or 13 percent)”
- Causal inference: placebo-subtracted treatment effect in randomised trials; difference-in-differences (a parallel-control unit's time-change subtracted); synthetic control (a weighted-control composite subtracted); regression adjustment (a conditional-mean subtracted); event studies (a pre-shock baseline subtracted).
- Experimental Design
- This controls for unit-specific confounders that are constant over time, as Card and Krueger (1994) demonstrate in their canonical application to minimum-wage employment effects.
This sourceLandmark difference-in-differences study using a natural-experiment design (NJ minimum-wage rise vs. PA control) to estimate causal employment effects from observational data under explicit assumptions.
Supported in partVerified against the work's full text
Card and Krueger is the canonical NJ-PA difference-in-differences application, but the paper never states that the design removes time-invariant unit-specific confounders.
“relative gain (the "difference in differences" of the changes in employment) is 2.76 FTE employees (or 13 percent)”
- This controls for unit-specific confounders that are constant over time, as Card and Krueger (1994) demonstrate in their canonical application to minimum-wage employment effects.
- Holdout Set
- Policy evaluation: pilot regions reserved as comparison groups; staged rollouts where later cohorts serve as held-out reality against early-cohort interpretations; difference-in-differences designs.
This sourceCanonical difference-in-differences policy evaluation using an untreated comparison region as held-out reality.
Supported in partVerified against the work's full text
Card and Krueger use an untreated Pennsylvania comparison group and report a difference-in-differences estimate; they do not describe pilot regions or staged rollouts.
“a control group of fast-food stores in eastern Pennsylvania forms a natural basis for comparison with the experiences of restaurants in New Jersey”
- Policy evaluation: pilot regions reserved as comparison groups; staged rollouts where later cohorts serve as held-out reality against early-cohort interpretations; difference-in-differences designs.
- Statistical Inference
- This design controls for time-invariant confounders and time-varying confounders that affect both cities equally.
This sourceLandmark difference-in-differences study: uses a natural-experiment design to estimate causal employment effects from observational data, illustrating how design plus statistical methods enable causal inference under explicit assumptions.
Supported in partVerified against the work's full text
Card and Krueger apply a New Jersey vs Pennsylvania difference-in-differences and test the control group, but never state the confounder-control property in general terms.
“The relative gain (the "difference in differences" of the changes in employment) is 2.76 FTE employees (or 13 percent)”
- This design controls for time-invariant confounders and time-varying confounders that affect both cities equally.
Domain-specific¶
- Difference-in-Differences
- Card and Krueger's 1994 study of New Jersey's minimum-wage increase — comparing fast-food employment in New Jersey against neighbouring Pennsylvania — brought DiD into prominence in applied microeconomics and generated a literature that has since extended the design to staggered-adoption settings (where different units receive treatment at different times), synthetic-control methods (where the control unit is constructed as a weighted combination of donor units), and triple-difference specifications (where an additional contrast further reduces confounding)
This sourceThe New Jersey versus Pennsylvania minimum-wage study as labour economics' defining difference-in-differences case. New Jersey's 1 April 1992 minimum-wage increase from $4.25 to $5.05 an hour, with Pennsylvania's rate remaining fixed at $4.25 as the comparison state. Table 3 figures showing New Jersey FTE employment roughly steady (about +0.6 per store) while Pennsylvania's fell by roughly two workers per store.
Supported in partVerified against the work's full text
“the relative gain (the "difference in differences" of the changes in employment) is 2.76 FTE employees (or 13 percent)”
- Card and Krueger's 1994 study of New Jersey's minimum-wage increase — comparing fast-food employment in New Jersey against neighbouring Pennsylvania — brought DiD into prominence in applied microeconomics and generated a literature that has since extended the design to staggered-adoption settings (where different units receive treatment at different times), synthetic-control methods (where the control unit is constructed as a weighted combination of donor units), and triple-difference specifications (where an additional contrast further reduces confounding)
- Endogeneity
- Card and Krueger used a difference-in-differences design around a real event: in 1992 New Jersey raised its minimum wage while neighboring Pennsylvania did not
SupportedVerified against the work's full text
“the "difference in differences" of the changes in employment”
- Card and Krueger used a difference-in-differences design around a real event: in 1992 New Jersey raised its minimum wage while neighboring Pennsylvania did not
- Natural Experiment
Verification¶
Does it exist? Confirmed. This work's DOI resolves to a registered record, which fixes its identity. That is all it fixes.
Does it back the claim? Read against the text for 8 of 8 citations: 2 supported, 6 supported in part. Each verdict is shown under its citation below, with what in the work backs the sentence.
Support is checked per citation rather than per work — the same source can be cited soundly in one article and wrongly in another. Per-citation recording began recently, so a citation with no recorded check is a gap in the record rather than evidence it went unchecked.
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Links previously used in the corpus¶
Before the registry existed this work was also linked 2 other ways.
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