Card and Krueger (1994) study the effect of minimum wage on employment. In Febru
ID: 3225494 • Letter: C
Question
Card and Krueger (1994) study the effect of minimum wage on employment. In February 1992, New Jersey increased the minimum wage from $4.25 to $5.05 while Pennsylvania's minimum wage stayed at $4.25. In New Jersey, employment in February was 20.44 and in November was 21.03. In Pennsylvania, employment in February was 23.33 and in November was 21.17. (a) In this study, which is the treatment group and which is the control group? (b) What are the outcomes of different groups before and after treatment?Explanation / Answer
Treatment group is the one one in which we use treatment or we use experimental manipulate, for example, a treatment group receives a medication while a control group does not receive any.
(a) So in our study, New Jersey is the treatment group, while Pennsylvania is the control group.
(b) We can clearly see that employment in treatment group has increased while in control group the employment has decreased a bit.
Thus increased wages increases employment or employability of those people.