TY - JOUR
T1 - Minimum wage restrictions and employee effort in incomplete labor markets
T2 - An experimental investigation
AU - Owens, Mark F.
AU - Kagel, John H.
N1 - Funding Information:
Research has been partially supported by grants from the National Science Foundation and Jones College of Business at Middle Tennessee State University. We thank various colleagues and seminar participants for helpful suggestions along with the comments of two referees and a co-editor of this Journal. We also thank Susan Rose, John Lightle and Adam Hogan for their help in conducting experiments. Any opinions, findings, and conclusions or recommendations in this material are those of the authors and do not necessarily reflect the views of the National Science Foundation.
PY - 2010/3
Y1 - 2010/3
N2 - A minimum wage raises average wages along with modest increases in employees' average effort levels, generating a Pareto improvement in social welfare. The minimum wage reduces effort in the neighborhood of the minimum, but has no systematic effect on effort levels at higher wages. As a consequence average effort increases modestly with a minimum wage as it raises average wages. Similar results are reported within groups, both when introducing and eliminating a minimum wage, although the within group effects of introducing a minimum wage are stronger than dropping it.
AB - A minimum wage raises average wages along with modest increases in employees' average effort levels, generating a Pareto improvement in social welfare. The minimum wage reduces effort in the neighborhood of the minimum, but has no systematic effect on effort levels at higher wages. As a consequence average effort increases modestly with a minimum wage as it raises average wages. Similar results are reported within groups, both when introducing and eliminating a minimum wage, although the within group effects of introducing a minimum wage are stronger than dropping it.
UR - http://www.scopus.com/inward/record.url?scp=77249096806&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=77249096806&partnerID=8YFLogxK
U2 - 10.1016/j.jebo.2009.12.002
DO - 10.1016/j.jebo.2009.12.002
M3 - Article
AN - SCOPUS:77249096806
SN - 0167-2681
VL - 73
SP - 317
EP - 326
JO - Journal of Economic Behavior and Organization
JF - Journal of Economic Behavior and Organization
IS - 3
ER -
