Table 2 presents these results for a variety of alternative specifications: the hourly wage (estimated only for employed individuals), number of employed individuals (extensive margin), total input of hours worked (extensive margin plus intensive margin), and earnings (including none for unemployed individuals). Column 1 of the table contains our preferred estimates, using exactly the specification in equations (9) and (10).

Table 2.
Estimates of the Effect of the Minimum Wage Hike at Age 18
(1)(2)(3)(4)(5)
Specification:BaselineMonth FEMonth and Cohort FEMonth and Cohort FE and Dummies for Event Time −2 to 2 −1 and $+$1Only Event Time
A. Hourly wage
Coefficient (DKK) 46.1 46.1 46.1 49.6 42.5
[95% confidence interval] [45.2, 47.0] [45.4, 46.8] [45.5, 46.8] [49.0, 50.2] [41.3, 43.6]
Percent change (%) 40.0 39.2 39.2 42.0 37.4
[39.2, 40.8] [38.6, 39.8] [38.6, 39.7] [41.4, 42.6] [36.5, 38.3]
B. Employment
Coefficient (% points) −15.0 −15.1 −15.0 −17.8 −12.3
[−15.7, −14.3] [−15.6, −14.6] [−15.5, −14.6] [−18.4, −17.2] [−13.2, −11.3]
Percent change (%) −32.8 −31.9 −32.2 −38.0 −27.1
[−34.3, −31.2] [−33.0, −30.9] [−33.2, −31.2] [−39.3, −36.6] [−29.2, −25.0]
Implied elasticity −0.82 −0.81 −0.82 −0.90 −0.72
C. Hours worked
Coefficient (hrs.) −7.2 −7.3 −7.2 −8.6 −5.8
[−7.9, −6.4] [−7.8, −6.7] [−7.8, −6.7] [−9.5, −7.8] [−6.8, −4.9]
Percent change (%) −45.0 −45.2 −44.4 −53.2 −37.0
[−49.6, −40.5] [−48.7, −41.7] [−48.3, −40.5] [−59.0, −47.4] [−42.9, −31.0]
Implied elasticity −1.13 −1.15 −1.13 −1.27 −0.99
D. Wage Earnings
Coefficient (DKK) −40.3 −53.0 −46.2 −125.2 −41.5
[−125.1, 44.5] [−118.1, 12.1] [−115.5, 23.1] [−237.4, −12.9] [−61.2, 144.2]
Percent change (%) −0.02 −0.03 −0.03 −0.07 0.02
[−0.07, 0.03] [−0.07, 0.01] [−0.06, 0.01] [−0.13, −0.01] [−0.04, 0.09]
Observations 13,130,982 13,130,982 13,130,982 13,130,982 13,130,982
(1)(2)(3)(4)(5)
Specification:BaselineMonth FEMonth and Cohort FEMonth and Cohort FE and Dummies for Event Time −2 to 2 −1 and $+$1Only Event Time
A. Hourly wage
Coefficient (DKK) 46.1 46.1 46.1 49.6 42.5
[95% confidence interval] [45.2, 47.0] [45.4, 46.8] [45.5, 46.8] [49.0, 50.2] [41.3, 43.6]
Percent change (%) 40.0 39.2 39.2 42.0 37.4
[39.2, 40.8] [38.6, 39.8] [38.6, 39.7] [41.4, 42.6] [36.5, 38.3]
B. Employment
Coefficient (% points) −15.0 −15.1 −15.0 −17.8 −12.3
[−15.7, −14.3] [−15.6, −14.6] [−15.5, −14.6] [−18.4, −17.2] [−13.2, −11.3]
Percent change (%) −32.8 −31.9 −32.2 −38.0 −27.1
[−34.3, −31.2] [−33.0, −30.9] [−33.2, −31.2] [−39.3, −36.6] [−29.2, −25.0]
Implied elasticity −0.82 −0.81 −0.82 −0.90 −0.72
C. Hours worked
Coefficient (hrs.) −7.2 −7.3 −7.2 −8.6 −5.8
[−7.9, −6.4] [−7.8, −6.7] [−7.8, −6.7] [−9.5, −7.8] [−6.8, −4.9]
Percent change (%) −45.0 −45.2 −44.4 −53.2 −37.0
[−49.6, −40.5] [−48.7, −41.7] [−48.3, −40.5] [−59.0, −47.4] [−42.9, −31.0]
Implied elasticity −1.13 −1.15 −1.13 −1.27 −0.99
D. Wage Earnings
Coefficient (DKK) −40.3 −53.0 −46.2 −125.2 −41.5
[−125.1, 44.5] [−118.1, 12.1] [−115.5, 23.1] [−237.4, −12.9] [−61.2, 144.2]
Percent change (%) −0.02 −0.03 −0.03 −0.07 0.02
[−0.07, 0.03] [−0.07, 0.01] [−0.06, 0.01] [−0.13, −0.01] [−0.04, 0.09]
Observations 13,130,982 13,130,982 13,130,982 13,130,982 13,130,982

This table reports estimates of the effect of the discrete change in minimum wages occurring at age 18 on average hourly wages, employment, hours worked, and earnings. For each outcome variable, we report the coefficient of interest measuring the effect at the discontinuity—for example, $ψ$ in equation (9)—and the percent change in the outcome, calculated using the midpoint method—for example, $Δ$ in equation (10)). We report 95% confidence intervals, calculated from standard errors clustered by (monthly) birth cohort, in brackets below these point estimates. In panels B and C, we report the elasticity implied by the percent change in the labor input and the percent change in hourly wages from panel A. Column 1 is our baseline specification; see equation (9). Subsequent columns add month and birth-year cohort fixed effects to this specification; column 4 also includes dummy variables from two months before to two months after the workers' 18th birthdays to remove these months from the estimation of the age polynomial and discontinuity; while column 5 uses only the month before the workers' 18th birthdays and the month after to identify the effects.

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