Announcements

ECONOMICS SEMINAR - Doruk Cengiz

Author: CASE
Time: 16:00
Location: CASE 127

KOC UNIVERSITY
FACULTY OF ADMINISTRATIVE SCIENCES AND ECONOMICS
ECONOMICS SEMINAR

WEDNESDAY- 13 February 2019

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Speaker  : Doruk Cengiz- University of Massachusetts Amherst

Title        :  Seeing Beyond the Trees: Using machine learning to estimate the impact of minimum wages on affected individuals

Time       : 16:00-17:30

Place      : CASE 127

Date       : 13 February 2019 -WEDNESDAY

Abstract: Much of the minimum wage literature has focused on narrow sub-groups such as teens. We use machine learning tools to construct much more representative demographically-based treatment groups capturing more than 73% of all likely minimum wage workers. We find that there is a very clear increase in average wages of workers in these groups following a minimum wage increase, validating our approach to constructing these treatment groups. At the same time, there is little evidence of employment loss or a decline in fringe benefits in response to the policy change. These results are robust for a variety of methods to construct the counterfactuals including a data-driven interactive fixed effects model. Importantly, when we consider specifications that indicate a disemployment effect for teens similar to some of the literature, we find no adverse employment effect on affected non-teens suggesting that the current controversy is largely limited to teens, a small and a shrinking share of the minimum wage workers. Finally we propose a falsification test that reveals whether an estimated minimum wage effect is confounded by shocks to unaffected individuals which further reconciles conflicting evidence in the literature.