Fast-Food Minimum Wage (AB 1228)

Causal inference Quasi-experimental design Applied microeconometrics

Problem

California's AB 1228 raised the fast-food minimum wage to $20. I wanted to know what the short-run effect on youth employment actually was, and whether we could separate that effect from broader macroeconomic trends happening at the same time.

Method

I built a microdata panel from CPS ORG extracts (IPUMS), restricting to ages 16–24 in California and neighboring control states. I estimated a difference-in-differences model with two-way fixed effects and heteroskedasticity-robust standard errors, verified the parallel pre-trends assumption, and ran a Triple-Difference specification to separate fast-food sector effects from broader youth labor market shifts.

Result

No statistically significant collapse in youth employment. Effects varied by metro area, which points more to partial adjustment than a broad disemployment response. Full specification, robustness checks, and pre-trends tests are in the working paper below.

Full paper (PDF)