Living wage ordinance on employment levels

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Reference no: EM133629836

Question

The City of Wonderland passed a living wage ordinance. Broadly speaking, the ordinance covered firms that had contracts with the City. However, for a variety of reasons, some firms were exempt from having to pay the living wage, and thus were unaffected by the ordinance.

Data suggests that prior to the passage of the ordinance the average number of FTEs (full-time equivalent employees) was 180 in "affected" firms and 133 in "unaffected" firms. After the passage of the ordinance, the average number of FTEs was 166 in "affected firms" and 144 in "unaffected" firms.

Calculate the difference-in-difference estimate of the effect of the living wage ordinance on employment levels in city contractors.

Reference no: EM133629836

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