Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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. G, 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. B, B 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.
Step by Step Solution
★★★★★
3.48 Rating (164 Votes )
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started