n April 1992, the state of New Jersey (NJ) raised its hourly minimum wage from $4.25 to $5.05. To evaluate the effects of this wage increase, the authors surveyed 410 fast-food restaurants (leading employers of minimum wage workers) in New Jer- sey and Eastern Pennsylvania (PA) - where the minimum wage was constant- a few months before and a few months after the minimum wage was implemented in New Jersey. For each establishment i we have information {Yi0, Yi1, N Ji, Xi} where Yit is the employment rate in period t, N Ji is equal to 1 if the restaurant is in NJ and 0 if in PA and Xi is a vector of restaurant specific variables. There is information on two periods: information at t = 0 is collected before the minimum wage increase in February, 1992 and information at t = 1 is collected in December, 1992