Economists commonly teach that minimum wages cause some unemployment.The federal minimum wage is $7.25/hour, but roughly...

Economists commonly teach that minimum wages cause some unemployment.The federal minimum wage is $7.25/hour, but roughly 33% of states have higher state minimum wages.

a. Why cant you test the "minimum wages cause unemployment" theory by simply comparing unemployment rates across states with different minimum wages?

b. What would be a better way to test this hypothesis?

Expert Solution

Rahul Sunny answered 2 years ago

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