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Studying Labor Market Institutions in the Lab: Minimum Wages, Employment Protection and Workfare

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  • Falk, Armin

    (University of Bonn)

  • Huffman, David B.

    (University of Pittsburgh)

Abstract

A central concern in economics is to understand the interplay between institutions and labor markets. In this paper we argue that laboratory experiments are a powerful tool for studying labor market institutions. One of the most important advantages is the ability to implement truly exogenous institutional change, in order to make clear causal inferences. We exemplify the usefulness of lab experiments by surveying evidence from three studies, each of which investigates a different, crucial labor market institution: minimum wage laws, employment protection legislation and workfare.

Suggested Citation

  • Falk, Armin & Huffman, David B., 2006. "Studying Labor Market Institutions in the Lab: Minimum Wages, Employment Protection and Workfare," IZA Discussion Papers 2310, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2310
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    References listed on IDEAS

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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Brice Corgnet & Roberto Hernán-Gonzalez & Stephen Rassenti, 2013. "Firing Threats and Tenure: Incentive effects and impression management," Working Papers 13-15, Chapman University, Economic Science Institute.
    2. Christoph Engel, 2007. "The Cognitive Effect of a Minimum Wage. Comment," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(1), pages 52-55, March.
    3. Brice Corgnet & Roberto Hernán-González & Stephen Rassenti, 2011. "Real Effort, Real Leisure and Real-time Supervision: Incentives and Peer Pressure in Virtual Organizations," Working Papers 11-05, Chapman University, Economic Science Institute.
    4. Corgnet, Brice & Hernán-González, Roberto & Rassenti, Stephen, 2015. "Firing threats: Incentive effects and impression management," Games and Economic Behavior, Elsevier, vol. 91(C), pages 97-113.
    5. Brandts, Jordi & Corgnet, Brice & Hernán-González, Roberto & Ortiz, José Mª & Solà, Carles, 2021. "Watching or not watching? Access to information and the incentive effects of firing threats," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 672-685.
    6. Brice Corgnet & Joaquín Gómez-Miñambres & Roberto Hernán-González, 2015. "Goal Setting and Monetary Incentives: When Large Stakes Are Not Enough," Management Science, INFORMS, vol. 61(12), pages 2926-2944, December.
    7. Peichl, Andreas & Schneider, Hilmar, 2010. "Soziale Gerechtigkeit durch Leistung und Gegenleistung: Workfare im Niedriglohnbereich," IZA Standpunkte 25, Institute of Labor Economics (IZA).
    8. Peichl, Andreas & Siegloch, Sebastian, 2012. "Accounting for labor demand effects in structural labor supply models," Labour Economics, Elsevier, vol. 19(1), pages 129-138.
    9. Schneider, Hilmar & Uhlendorff, Arne & Zimmermann, Klaus F., 2010. "Mit Workfare aus der Sozialhilfe? Lehren aus einem Modellprojekt," IZA Standpunkte 33, Institute of Labor Economics (IZA).
    10. Christoph Engel & Urs Schweizer, 2007. "Editorial Preface," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(1), pages 1-4, March.
    11. Brice Corgnet & Roberto Hernán-González & Eric Schniter, 2015. "Why real leisure really matters: incentive effects on real effort in the laboratory," Experimental Economics, Springer;Economic Science Association, vol. 18(2), pages 284-301, June.
    12. Galeotti, Fabio & Zizzo, Daniel John, 2018. "Identifying voter preferences: The trade-off between honesty and competence," European Economic Review, Elsevier, vol. 105(C), pages 27-50.
    13. John J. Donohue III, 2007. "Studying Labor Market Institutions in the Lab: Minimum Wages, Employment Protection, and Workfare. Comment," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(1), pages 46-51, March.
    14. Oren Bar-Gill & Christoph Engel, 2016. "Bargaining in the Absence of Property Rights: An Experiment," Journal of Law and Economics, University of Chicago Press, vol. 59(2), pages 477-495.

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    More about this item

    Keywords

    employment protection legislation; laboratory experiments; minimum wages; workfare;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs

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