His long-awaited post is here (well, long-awaited by me because I've been discussing this a lot with him lately!). David Henderson's summary is here.
The post comes in two parts - first arguing that even if what I'll call the quasi-experimental studies (Dube's work and related papers) are right it does not mean raising the good idea. Bob presents familiar, and I think strong, arguments about the fact that the increase to $10.10 is not "modest" by the standards of the study, and second that even if employment doesn't decline, employment for disadvantaged workers might.
Both I think are essentially right, although I probably wouldn't make the point about a modest increase quite as strongly as Bob does. As I wrote up recently, the proposed nominal increase is certainly larger than what is typically studied in these studies, but that is only half of the equation. You also have to consider changes in labor demand, and productivity statistics strongly indicate that the point where the minimum wage is binding has probably been increasing faster than the minimum wage for quite awhile. Forget the fact that labor productivity as measured by the BLS isn't exactly marginal productivity - if one serves as a decent proxy for the other, the faster growth of productivity than the real minimum wage decade after decade seems notable if we are talking about whether the increase is a "modest" one or not. So I think Bob makes an important point here, but it's only half of the point that ought to be made.
The second half discusses whether the quasi-experimental studies should be trusted at all. We've been over this ground a lot recently. You know I think that:
1. The contiguous county sample is ESSENTIAL.
2. Meer and West have a strong critique (although it would be strange to think of when it might apply in the real world), but...
3. Dube seems to have done precisely what I thought would be the right response - using trends from the pre-period.
What's nice is that Bob's piece brings up Neumark and Salas, which I haven't discussed here. They show that alternative time trend specifications reverse some of these results (although I don't know if this is with a contiguous counties sample - Bob, do you know?). I don't know the paper well - my one questions is whether there is an overfitting issue - basically the Meer and West critique could very conceivably apply to Neumark and Salas.
That's just thinking off the top of my head - curious what you all think of Neumark and Salas.
I think Bob is right to treat these as open questions (both the scientific question and the policy question), but I think on the scientific question the quasi-experimental literature is quite strong. From my perspective, identification and eliminating bias in the estimate is the primary question - so the contiguous county studies carry a lot of weight with me.
1 hour ago