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Suppose that Fairfield began a living wage that paid all landscapers in the city a wage above the current market wage. Vacaville, a neighboring city, did not begin a living wage. Below are employment date for the year before and the year after the living wage went into effect in Fairfield.
City Landscape employment year Landscaper employment year
before living wage in Fairfield after living wage in Fairfield
Fairfield 315 354
Vacaville 278 331
a. Explain whether or not Fairfield creating a living wage is a natural experiment that can help to determine the impact of the living wage on the employment of landscapers.
b. Use difference in difference estimation to calculate the impact of the living wage on the percent change in the employment level in Fairfield.
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