PSAT Reading & Writing Question of the Day
Test your knowledge with a hand-picked multiple-choice question.
Economic models often predict that raising the minimum wage reduces employment among low-wage workers by making labor more expensive. Yet recent meta-analyses of local policy changes report effects that are, on average, small and sometimes statistically indistinguishable from zero. Case studies, however, reveal notable variation: tourism-dependent counties show different outcomes than manufacturing hubs, and cities with tight labor markets respond differently than those with slack. This pattern suggests that local labor-market conditions mediate how a wage floor translates into employment changes. Recognizing that heterogeneity, newer studies embed measures of labor demand and industry mix into their designs. Doing so narrows the gap between theoretical predictions and empirical results by allowing estimated effects to vary with context.
Which choice best describes the function of the underlined sentence in the overall structure of the text?