by Benjamin Schoefer (UC Berkeley) & Michael Weber (University of Chicago Booth School of Business)

How do changes in labor costs, including minimum wages, affect producer prices and ultimately inflation? The answer to this core question in macroeconomics and labor economics has proved elusive because of data constraints. This project exploits micro data underlying the Bureau of Labor Statistics Producer Price Index to construct a set of industry- and location-specific producer price indices. Those indices enable us to measure the pass-through of labor costs into producer prices in a series of new double and triple difference identification designs.