We assess the effect of the minimum wage on labor market outcomes such as employment, unemployment, and labor force participation for most workers affected by the policy. We apply modern machine learning tools to construct demographically-based treatment groups capturing around 75% of all minimum wage workers--a major improvement over the literature which has focused on fairly narrow subgroups where the policy has a large bite (e.g., teens). By exploiting 172 prominent minimum wages between 1979 and 2019 we find that there is a very clear increase in average wages of workers in these groups following a minimum wage increase, while there is little evidence of employment loss. Furthermore, we find no indication that minimum wage has a negative effect on the unemployment rate, on the labor force participation, or on the labor market transitions. Furthermore, we detect no employment or participation responses even for sub-groups that are likely to have a high extensive margin labor supply elasticity--such as teens, older workers, or single mothers. Overall, these findings provide little evidence for changing search effort in response to a minimum wage increase.

We propose a novel method that infers the employment effect of a minimum wage increase by comparing the number of excess jobs paying at or slightly above the new minimum wage to the missing jobs paying below it. To implement our approach, we estimate the effect of the minimum wage on the frequency distribution of hourly wages using 138 prominent state-level minimum wage changes between 1979 and 2016. We find that the overall number of low-wage jobs remained essentially unchanged over five years following the increase. At the same time, the direct effect of the minimum wage on average earnings was amplified by modest wage spillovers at the bottom of the wage distribution. Our estimates by detailed demographic groups show that the lack of job loss is not explained by labor-labor substitution at the bottom of the wage distribution. We also find no evidence of disemployment when we consider higher levels of minimum wages. However, we do find some evidence of reduced employment in tradable sectors. In contrast to our bunching-based estimates, we show that some conventional studies can produce misleading inference due to spurious changes in employment higher up in the wage distribution.

This dissertation empirically examines effects of the minimum wage, immigration, and privatization; three of the most crucial policies that impact workers worldwide using recent advances in statistics and econometrics to provide causally interpretable results, and to reconcile controversies in the literature. In the first chapter, titled "Seeing Beyond the Trees: Using machine learning to estimate the impact of minimum wages on affected individuals", I identify minimum wage workers prior to estimating its effects using machine learning tools, and provide highly representative demographically-based groups that capture as much as 73.4% of all likely minimum wage workers. I find that there is a very clear increase in average wages of workers in these groups following a minimum wage increase, validating my approach to constructing these groups. I find scant evidence of employment loss or a decline in fringe benefits in response to the policy change. I show that the results are robust for a variety of methods to construct the counterfactuals including a data-driven interactive fixed effects model. Importantly, when I consider specifications that indicate a disemployment effect for teens similar to some of the literature, I find no adverse employment effect on affected non-teens, - suggesting that the current controversy is largely limited to teens, a small and a shrinking share of the minimum wage workers. Finally, I propose a falsification test that reveals whether an estimated minimum wage effect is confounded by shocks to unaffected individuals which further reconciles conflicting evidence in the literature. In the second chapter, titled "Is It Merely A Labor Supply Shock? Impacts of Syrian Migrants on Local Economies in Turkey" co-authored with Hasan Tekg\"u\c{c}, we use a large and geographically varying inflow of over 2.5 million Syrian migrants in Turkey between 2012 and 2015 to study the effect of migration on local economies. We do not find adverse employment or wage effects for native-born Turkish workers overall, or those without a high school degree. These results are robust to a range of strategies to construct reliable control groups. On the other hand, we find evidence for a number of channels indicating demand side effects of migration that help offset the impact of a labor supply shock. Turkish workers' participation in the formal sector rose in response to the migration, consistent with complementarity of migrants and native born workers. In addition, migration led to an increase in residential building construction, with the number of new dwelling units increasing by more than 33%. Finally, we show that Syrian migration brought in capital and entrepreneurs to the host regions, spurring new business creation: the migration led to a more than 24% increase in new companies, reflecting an increase in both Syrian-founded and non-Syrian founded companies. Our findings suggest that migration-induced increases in regional demand and capital supply enable local labor markets to absorb inflow of migrant labor, and prevent sizable wage decline or job loss for native workers. In the third chapter, titled "When Does Privatization Process Begin? Total Effects of Privatization in Turkey", I examine effects of privatization process as a whole in Turkey. I find that the privatization has resulted in a 65% decline in firm-level workforce, an 18 percentage point increase in the profit-margin, and statistically no change in real sales. In addition, I show that the privatization is a process that starts before the date of sale of the firm. Therefore, overlooking the downsizing of the firm before the sale severely biases the results, which appears to be the underlying cause behind conflicting findings in the literature. I conclude that privatization results in an income transfer from wage-earners to profit-earners.