Minimum Wage Graduate Thesis (2016)

In this study, I wanted to see the effect minimum wage increases had on unemployment. To find the probability of being unemployed in two contiguous states (Oregon and Nevada) in the period 2002-2003 (the minimum wage in both states were at or above the federal minimum, and Oregon saw a much bigger increase), I took a number of dummy variables created from data taken from the Current Population Survey (CPS) and compared them in each state. Using variables for being “black” or “non-black,” “female” or “non-female,” etc. and filtering out ages below 18 (these possible workers would skew the results), I found that there was very little statistically significant difference. The dummy variable of being black lowered the employment rate in both states, suggesting that race affected your chance of finding work in these two states in this one year time period.

Overall, the P values and R2 values showed that each of these variables had little effect on employment overall, but that the increase in the minimum wage did cause a small decrease. However, the values showed no strong statistical significance, so the study was fairly inconclusive to the main question of whether or not a wage increase causes any decrease in employment among a wide range of people.

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