Replication and reanalysis are important endeavors in economics, especially when new findings run counter to conventional wisdom. In their Comment on our 1994 American Economic Review article, David Neumark and William Wascher (2000) challenge our conclusion that the April 1992 increase in the New Jersey minimum wage led to no loss of employment in the fast-food industry. Using data drawn from payroll records for a set of restaurants initially assembled by Richard Berman of the Employment Policies Institute (EPI) and later supplemented by their own datacollection efforts, Neumark and Wascher (hereafter, NW) conclude that “... the New Jersey minimum-wage increase led to a relative decline in fast-food employment in New Jersey” compared to Pennsylvania. 1 They attribute the discrepancies between their findings and ours to problems in our fast-food restaurant data set. Specifically, they argue that our use of employment data derived from telephone surveys, rather than from payroll records, led us to draw faulty inferences about the effect of the New Jersey minimum wage.

In this paper we attempt to reconcile the contrasting findings by analyzing administrative employment data from a new representative sample of fast-food employers in New Jersey and Pennsylvania, and by reanalyzing NW’s data. Most importantly, we use the Bureau of Labor Statistics’s (BLS’s) employer-reported ES-202 data file to examine employment growth of fast-food restaurants in a set of major chains in New Jersey and nearby counties of Pennsylvania. 2 We draw two samples from the ES-202 files: a longitudinal file that tracks a fixed sample of establishments between 1992 and 1993, and a series of repeated cross sections from the end of 1991 through 1997. Because the BLS data are derived from unemploymentinsurance (UI) payroll-tax records, the employment measures are free of the kinds of survey errors that NW allege affected our earlier results. In addition, because the ES-202 data include information for all covered employers in a fixed group of restaurant chains, there is no reason to doubt the representativeness of the BLS sample.