Seeing beyond the Trees: Using Machine Learning to Estimate the Impact of Minimum Wages on Labor Market Outcomes

We assess the effect of minimum wage on labor market outcomes such as employment, unemployment, and force participation for most workers affected by policy. apply modern machine learning tools to construct demographically-based treatment groups capturing around 75% all workers—a major improvement over literature which has focused fairly narrow subgroups where policy a large bite (e.g., teens). By exploiting 172 prominent wages between 1979 2019 we find that there is very clear increase in average these following increase, while little evidence employment loss. Furthermore, no indication negative unemployment rate, participation, or transitions. detect responses even sub-groups are likely have high extensive margin supply elasticity—such teens, older workers, single mothers. Overall, findings provide changing search effort response increase.