Cross-state differences in the minimum wage and out-of-state commuting by low-wage workers

Citation data:

Regional Science and Urban Economics, ISSN: 0166-0462, Vol: 64, Page: 137-147

Publication Year:
Usage 328
Abstract Views 245
Link-outs 75
Clicks 8
Captures 11
Exports-Saves 6
Readers 5
Mentions 21
Comments 15
Economics Blog Mentions 2
Blog Mentions 2
News Mentions 2
Social Media 180
Shares, Likes & Comments 105
Tweets 75
Citations 1
Citation Indexes 1
Reddit 15
Terra McKinnish
Elsevier BV
Economics, Econometrics and Finance; Social Sciences
Most Recent Tweet View All Tweets
Most Recent Blog Mention
Most Recent Economics Blog Mention
Most Recent News Mention
article description
The 2009 federal minimum wage increase, which compressed cross-state differences in the minimum wage, is used to investigate the claim that low-wage workers are attracted to commute out of state to neighboring states that have higher minimum wages. The analysis focuses on Public Use Microdata Areas (PUMAs) that experience commuting flows with one or more neighboring state. A difference-in-differences-in-differences model compares PUMAs that experienced a sizeable increase or decrease in their cross-border minimum wage differential to those that experience smaller change in the cross-border differential. Out-of-state commuting of low wage workers (less than 10 dollars an hour) is then compared to that of moderate wage workers (10–13 dollars an hour). The results suggest that an increase in own state's minimum wage, relative to neighbor's, increases the frequency with which low-wage workers commute out of the state. The analysis is replicated on the subset of PUMAs that experience commuting flows with more than one neighboring state, so that the estimates are identified entirely within PUMA. As a whole, the results suggest that low-wage workers tend to commute away from minimum wage increases rather than towards them.