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

John J. Horton

American Economic Review, 2025, vol. 115, issue 1, 117-46

Abstract: Firms posting job openings in an online labor market were randomly assigned minimum hourly wages. When facing a minimum wage, fewer firms hired, but those they did hire paid higher wages. Hours-worked fell substantially. Treated firms shifted to hiring more productive workers. Using the platform's imposition of a market-wide minimum wage after the experiment, I find that many of the experimental results also hold in equilibrium, including the substitution towards more productive workers. However, there was also a large reduction in the number of jobs posted for which the minimum wage would likely bind.

JEL-codes: J22 J23 J31 J38 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1257/aer.20170637

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