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

By:

Horton, John J

Material type:

Continuing resourcePublication details: American Economic Review; 2025Description: 117-146ISSN:

0002-8282

Subject(s):

Online resources:

Click here to access online

Summary: 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.

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Holdings
Item type	Current library	Vol info	Status	Barcode
Article Index	Dr VKRV Rao Library	Vol. 115, No. 1	Not for loan	AI1342

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.

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