In this paper, the authors study the outcome of an unusually clean natural experiment--California's large minimum wage increase of 1988. Two different approaches to evaluating the experiment result in the same conclusion: the textbook analysis of minimum wages holds true. In particular, the...

Some scholars have attributed earnings differences among locations to labor market conditions ("place effects") whereas others have focused on the skill level of residents ("person effects"). We estimate a variety of selection models in an effort to detect differences in labor market conditions...