Department of Economics

New Jersey and PA Once Again: What Happened to Employment When the PA-NJ Minimum Wage Differential Disappeared?

Department of Economics
University of Delaware
Working Paper #2007-08

New Jersey and PA Once Again:  What Happened to Employment When the PA-NJ Minimum Wage Differential Disappeared?

Saul D. Hoffman and Diane Trace


Card and Krueger’s analysis of the impact of the 1992 increase in the NJ state minimum wage on employment in fast-food restaurants in NJ and PA is very well known and still controversial. In 1996 and 1997, the federal minimum wage was increased in two steps from $4.25 to $5.15, thereby increasing the minimum wage by $0.90 in PA but by just $0.10 in NJ. We use CPS data from 1995 and 1998 to examine the impacts of this increase on employment in the two states, using difference-in-difference and difference-in-difference-in-difference estimators that exploit within-state and between-state comparisons. We find quite consistent evidence that employment of “at-risk” groups was negatively affected in PA relative to other groups in PA and to comparable groups in NJ.  We also find, looking back at the 1992 NJ increase, that the employment gains reported by Card and Krueger were not widely distributed.

JEL Classification: J010, J080, J780

Key Words: Minimum Wage, Card-Krueger

The Lerner College is home to a state-of-the-art financial trading facility, the $1.5 million student-led Blue Hen Investment Club, a student-managed restaurant and hotel, a high-technology development center of a global bank and a start-up experience for students with new business ideas.

Undergraduate scholarships, made possible through the generosity of alumni and friends, enable us to support promising scholars. Here, Delaware Gov. Jack Markell and his mother, Leni Markell, join recipients of the William Markell Scholarship (center), which benefits students in Accounting and MIS.

The Institute for Financial Services Analytics is a collaboration between the Lerner College, UD's College of Engineering and JPMorgan Chase, and hosts events for academics and the business community designed to address consumer analytics and industry applications.

All Lerner College departments offer discovery learning experiences and emphasize data-based analytics to enrich the student experience. Here, students at Vita Nova, our award-winning restaurant run through HRIM, joined professional chefs and winemakers in hosting a 2014 Mid-Atlantic Wine and Food Festival event.

Lerner College faculty - like Meryl Gardner, whose research on foods and moods was recently published in the Journal of Consumer Psychology - are thought leaders who command attention from influential business audiences, economists and policy makers.

  • Alfred Lerner College of Business & Economics
    303 Alfred Lerner Hall  •  Newark, DE 19716  •  USA  •  ©