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  5. Minimum Wages, Morality, and Efficiency: A Choice Experiment

AEA Papers and Proceedings

ISSN 2574-0768 (Print) | ISSN 2574-0776 (Online)

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Minimum Wages, Morality, and Efficiency: A Choice Experiment

  • Conor Lennon
  • Jose Fernandez
  • Stephan Gohmann
  • Keith Teltser
AEA Papers and Proceedings
vol. 109, May 2019
(pp. 176–81)
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Abstract

We use a choice experiment to examine public support for minimum wages. We first elicit respondents' moral assessment of two labor market systems: one with a minimum wage and one without. Then, we present four pairs of hypothetical employment outcomes and ask respondents to "vote." Our estimates suggest that the average respondent requires a 4.65 percentage point reduction in unemployment before they would support a system without a minimum wage. We also find that equity matters; respondents are 11.1 percentage points less likely to support a minimum wage if it disproportionately affects minorities and females.

Citation

Lennon, Conor, Jose Fernandez, Stephan Gohmann, and Keith Teltser. 2019. "Minimum Wages, Morality, and Efficiency: A Choice Experiment." AEA Papers and Proceedings, 109: 176–81. DOI: 10.1257/pandp.20191088

Additional Materials

JEL Classification

  • D12 Consumer Economics: Empirical Analysis
  • J38 Wages, Compensation, and Labor Costs: Public Policy