================================================ KEYWORDS FOR DATASET: Minimum Wage, Unemployment ================================================ ======================================================= ACCOMPANYING DATA PROVIDED BY: Guido Imbens UCLA, Dept. of Economics ======================================================= ================================ GENERAL EXPLANATION OF THE STUDY ================================ The accompanying data were used to study the effects of an increase in the minimum wage on unemployment. According to conventional economic theory, perfectly competitive employers will always cut their work force in response to any rise in the minimum wage. In practice, however, employer reactions are not so clear-cut: While some studies in the seventies confirmed the predictions of theory, earlier studies from the sixties, as well as more recent studies conducted in the early nineties, concluded that employment was unaffected by increases in the minimum wage. This study sought to clarify the issue. The New Jersey minimum wage increase of April 1, 1992, which raised the minimum wage from $4.25 to $5.05, provided a perfect opportunity. Because the fast-food industry employs predominantly low-wage workers, because the absence of tips simplifies the measurement of wages, and because fast-food restaurants are relatively easy to sample, the study chose to assess the effects of the minimum wage increase on a random sample of Burger King, Wendys, KFC, and Roy Rogers restaurants in New Jersey and eastern Pennsylvania. The restaurants were interviewed about one month before, and about eight months after, the wage increase went into effect. Information was collected at each restaurant about variables such as the number of employees, various product prices, and store hours. This data provided everything necessary to calculate the impact that the minimum wage increase made not only on employment rates, but also on food prices, which can always be raised to compensate for higher wages. Finally, since unemployment is affected by factors other than the minimum wage, the study made careful use of controls. The data from the restaurants in Pennsylvania, as well as data on a number of restaurants in New Jersey that had been using the new five dollar minimum wage as a base salary even before the official increase went into effect, provided these naturally. More details from the study may be found in the original article, whose citation is below. This article is available on the web at JSTOR at "www.jstor.org". Card, David and Krueger, Alan. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania." The American Economic Review 84.4 (Sept. 1994) 772-793. ============================= BRIEF DESCRIPTION OF THE DATA ============================= The final data set contains information on 410 restaurants randomly chosen from phonebooks in New Jersey and eastern Pennsylvania. For each restaurant information is provided on 46 variables; about half pertain to the period before the minimum wage increase, and about half concern the period after. After it was chosen from the phonebook, each restaurant was called for a telephone survey. To elicit a response restaurants were called back as many as nine times, and the researchers obtained 410 completed interviews-- an 87 percent response rate. ======================== HOW TO USE THE DATA FILE ======================== The data file is comma delimited text. The first row contains the list of variables and each remaining row contains the corresponding data for an individual restaurant. Missing data are indicated by a period. Explanations for all variable abbreviations are given below. ============================================================== EXPLANATION OF DATA MEASUREMENT ABBREVIATIONS IN THE DATA FILE ============================================================== SHEET sheet number (unique store id) CHAIN chain 1=Burger King; 2=KFC; 3=Roy Rogers; 4=Wendys CO_OWNED 1 if company owned STATE 1 if NJ; 0 if Pa Dummies for location: SOUTHJ 1 if in southern NJ CENTRALJ 1 if in central NJ NORTHJ 1 if in northern NJ PA1 1 if in PA, northeast suburbs of Phila PA2 1 if in PA, Easton etc SHORE 1 if on NJ shore First Interview: NCALLS number of call-backs* EMPFT # full-time employees EMPPT # part-time employees NMGRS # managers/ass't managers WAGE_ST starting wage ($/hr) INCTIME months to usual first raise FIRSTINC usual amount of first raise ($/hr) BONUS 1 if cash bounty for new workers PCTAFF % employees affected by new minimum MEALS free/reduced price code (See below) OPEN hour of opening HRSOPEN number hrs open per day PSODA price of medium soda, including tax PFRY price of small fries, including tax PENTREE price of entree, including tax NREGS number of cash registers in store NREGS11 number of registers open at 11:00 am Second Interview: TYPE2 type 2nd interview 1=phone; 2=personal STATUS2 status of second interview: see below DATE2 date of second interview MMDDYY format NCALLS2 number of call-backs* EMPFT2 # full-time employees EMPPT2 # part-time employees NMGRS2 # managers/ass't managers WAGE_ST2 starting wage ($/hr) INCTIME2 months to usual first raise FIRSTIN2 usual amount of first raise ($/hr) SPECIAL2 1 if special program for new workers MEALS2 free/reduced price code (See below) OPEN2R hour of opening HRSOPEN2 number hrs open per day PSODA2 price of medium soda, including tax PFRY2 price of small fries, including tax PENTREE2 price of entree, including tax NREGS2 number of cash registers in store NREGS112 number of registers open at 11:00 am Codes: Free/reduced Meal Variable: 0 = none 1 = free meals 2 = reduced price meals 3 = both free and reduced price meals Second Interview Status: 0 = refused second interview (count = 1) 1 = answered 2nd interview (count = 399) 2 = closed for renovations (count = 2) 3 = closed "permanently" (count = 6) 4 = closed for highway construction (count = 1) 5 = closed due to Mall fire (count = 1) *Note: number of call-backs = 0 if contacted on first call ================================================ STATISTICAL TESTS AND ANALYSES USED IN THE STUDY ================================================ 1) t-test for difference of means 2) Basic Linear Regression