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Financial ServicesPrice signalMixed

Seattle Minimum Wage Study

University of Washington · Seattle, WA, United States · 2016

Summary

The University of Washington study of Seattle's minimum wage increase found a counterintuitive result: average earnings for low-wage workers fell as employers reduced hours faster than wages rose. The finding was disputed by a UC Berkeley study using a different methodology that found no employment or hours reduction. The methodological debate — how to construct the counterfactual for Seattle — illustrates the difficulty of causal inference from policy rollouts, and why pre-specified synthetic control designs and randomized variation (when available) are superior to retrospective observational studies.

Research question

"How did Seattle's minimum wage increase from $9.47 to $13/hour affect low-wage workers?"

Methodology

Intervention

Seattle raised minimum wage in two steps; study used administrative payroll data to track affected workers

Assignment

Difference-in-differences with synthetic control (not randomized)

Sample size

All covered workers in Seattle (~4.6 million quarterly worker-employer observations)

Primary outcome

Hours worked; total earnings; employment

Effect estimate

Hours worked fell 9%; average earnings fell $125/month for low-wage workers at $13 level; employment effect near zero

Decision

Ongoing policy debate; findings contested by subsequent studies using different methods

Result

Mixed

Hours worked fell 9%; average earnings fell $125/month for low-wage workers at $13 level; employment effect near zero

Evidence strength

Moderate

Quasi-experimental design; causal interpretation requires care.

Replication status

Open for replication

Institution

University of Washington

Location

Seattle, WA, United States

Year

2016

Policy area

Financial Services

Mechanism

Price signal

More from these institutions

Other trials of this mechanism

Cite this entry

University of Washington. (2016). Seattle Minimum Wage Study. The Experiment Society Registry. Retrieved from https://www.experimentsociety.org/registry/seattle-minimum-wage-study (primary report: https://evans.uw.edu/policy-impact/minimum-wage-study/)

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Open for replication

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