Question

Explain how natural experiments are useful to the empirical estimation of the effects of minimum wages on employment.

Answer 1

natural experiments actually understand the effects of minimum wages and employment to a great extent and for instance consider the case where a natural experiment is conducted after the minimum wage effect where the number of people employed before the minimum wage and after the minimum wage are taken. This can be done for various industries and companies as a result of which, one can understand weather significant change can be seen after the minimum wage law is in play and this can tell us about the unemployment it is actually causing on the whole