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Lyman Stone @lymanstoneky
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It's #NBERday! Only a few papers drew my attention this week, so the thread'll be short.
Really just 3. Short publish list today and even short list for topics I'm curious about. #NBERday
Let's get to it, then!

Q: What happens to low wage workers when minimum wages goes up?

A: Wages rise, hours worked fall. Income raises: but only for experienced workers, and partly because they get jobs commuting outside of the high-wage region.
#NBERday nber.org/papers/w25182
This is another study out of Washington focused on Seattle's experience. It's a fairly complete and longitudinal study of low-wage workers exposed to a major wage shock, so interesting. #NBERday
A key finding they make is that worker-earnings rose on average by about $10/week when you account for synthetic controls, hours change, wage change, etc.

What they don't say is what weekly earnings were at baseline. My assumption is ~$300-$400? #NBERday
This means that raising the minimum wage by something like 20-40% increased earnings of directly impacted workers by 2-4%. i.e. changes to hours worked offset 90% of the wage gains!! #NBERday
The authors further note that of that $10 weekly earnings gain, 100% of it was to more experienced low wage workers, and that there was a decline in "new entrants" to low wage work.

i.e. there was a reduction in hiring of low-wage (<$15/hr) workers #NBERday
So, reductions in hours offset something like 70-90% of wage increases.

Then there are reductions in hiring of new workers, partly offset by increasing worker longevity for a specific firm. #NBERday
And finally, *at least* 25% of the $10/week earnings bump is explained by experienced workers commuting outside of Seattle more for work. The authors get the 25% by assuming the workers made $9.37/hr for that commuting work. If they made more, share rises. #NBERday
In other words:
70-90% of the wage hike went to reduced hours

Of the 2-6% hike to weekly earnings enjoyed:
100% went to experienced workers

Among experienced workers, 20-50% of wage gains are from longer commutes to new jobs outside Seattle. #NBERday
In other words.... a massive minimum wage hike *might* have managed to transfer an amount of money from Ownership to Labor equal to.... $1-$3 per week? Maybe? No study of prices here though. #NBERday
Mostly what happened is younger and minority workers got their hours cut so older workers could keep working the same while they looked for other jobs outside of Seattle. #NBERday
Ringing endorsement of higher minimum wages this is not. #NBERday
Next up:

Q: When wait times for EB-2 visas rise, do impacted applicants go back to their home countries at a higher rate?

A: Yes. The delay time to granting permanent residency alters return rates. #NBERday nber.org/papers/w25175
There aren't tons of exciting pictures from this paper, however there is one nice graph showing expected wait times for permanent residency based on when an application is submitted. #NBERday
The reason this happens is because of specific rules about how many EB-2 visas can be granted to specific countries in a given window, and when those over the cap will be dealt with. It's an automatic-ish policy. #NBERday
The paper is pretty self-explanatory though: make people wait and some of them go home! #NBERday
Note:

One ESSENTIAL piece of any immigration reform aiming to improve the skills-mix of immigration would be more EB-2 visas and eliminated EB-2 wait times. #NBERday
Last paper:

Q: If you randomly assign college students into peer groups with different study habits do they change their study habits?

A: Yes.
#NBERday nber.org/papers/w25168
Berea College, a fantastic institution for many reasons, did a study with time diaries and detailed friendship-network-surveys of their freshman classes to identify determinants of study habits and outcomes. #NBERday
The reason Berea cares about this is because they ONLY admit 1st-gen college students or nearabouts to it; they admit *exclusively* students who would be considered "at risk" in some sense at other unis. #NBERday
So Berea started studying the issue. They surveyed admitted students before they arrived on campus, asking them while in HS about their study habits. Again, these kids are already admitted tuition-free so little incentive to lie. #NBERday
Then they had them do time diaries regularly in their freshman year, and and do detailed regular friendship-network surveys. #NBERday
Crucially, *friendships* are endogenous to some extent: people select friends based on similarity.

*Roommate* assignments are random. And the researchers can look at both. #NBERday
They find the expected outcomes: study-prone friends look like they cause more studying, but much of that is just endogeneity bias. But randomly assigned roommates *still* "rub off" on one another (mostly positively). #NBERday
So that's a neat demonstration of peer effects! #NBERday
Let me jump back to minimum wages. This tweet is a significant misreading of the paper: #NBERday
What actually happened was income did actually fall for some less experienced workers. Many people worked less and got same income. Some people worked more and got more income, largely by having longer commutes. And in general, most low wage workers improved. BUT.... #NBERday
A large number of people who *would have become* low-wage workers *instead* were disemployed entirely. New entrance into working declined sharply. #NBERday
So:
1. A higher minimum wage did ~nothing to e.g. reduce poverty because hours offset wage hikes
2. A higher minimum wage maybe made poverty worse by locking many people out of low-wage employment
#NBERday
Now it is true, if your primary concern is maximizing leisure time within a given budget constraint, minimum wage was successful! Many low-wage workers had more leisure time available!

But that's *usually* not given as the rationale for minimum wage hikes? #NBERday
Anyways, that's all for today! #NBERday
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