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

John Horton

No 6548, CESifo Working Paper Series from CESifo Group Munich

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.

Keywords: minimum wages; field experiments; hiring (search for similar items in EconPapers)
JEL-codes: J01 J08 (search for similar items in EconPapers)
Date: 2017
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