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Price Floors and Employer Preferences: Evidence from a Minimum Wage Experiment

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  • John Horton

Abstract

Minimum hourly wages were randomly imposed on firms posting job openings in an online labor market. A higher minimum wage raised the wages of hired workers substantially. However, there was some reduction in hiring and large reductions in hours-worked. Treated firms hired more productive workers, which can explain, in part, the reduction in hours-worked: with more productive workers, projects were completed in less time. At the conclusion of the experiment, the platform imposed a market-wide minimum wage. A difference-in-differences analysis shows that, in equilibrium, firms still substitute towards more productive workers, adversely affecting less productive workers.

Suggested Citation

  • John Horton, 2017. "Price Floors and Employer Preferences: Evidence from a Minimum Wage Experiment," CESifo Working Paper Series 6548, CESifo.
    • Handle: RePEc:ces:ceswps:_6548
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    References listed on IDEAS

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    More about this item

    Keywords

    minimum wages; field experiments; hiring;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies

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