Question
The table below shows the average employment in the number of fast food workers in the states of California and Oregon: (a) On a given
The table below shows the average employment in the number of fast food workers in the states of California and Oregon:
(a) On a given date, Oregon's minimum wage rose from 4.25 to 5.05 per hour, while the minimum wage in California stayed constant. Based on the table, what is the change in mean employment in Oregon? Is the employment change in Oregon before and after the policy enough information to give the effect of the minimum wage increase on employment? Why or why not?
(b) If we use look at another state (say: California) as a comparison group, does it appear that the minimum wage in Oregen increased or decreased employment? What key assumptions do we have to make in order to use California as a control group to measure the causal effect of minimum wage on employment?
(c) Why does the minimum wage increase in Oregon cause an increase in employment?
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