Social Sciences
4 years ago

Minimum-wage hikes may decrease employee effort, study finds.

Accounting Organizations and Society
The effects of minimum-wage increases on wage offers, wage premiums and employee effort under incomplete contracts
William D. Brink, Xi Kuang, Michael Majerczyk

Paper Summary

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Labor Dynamics

Minimum-wage increases can affect how much effort employees put into their work. When minimum wage goes up, companies offer higher wages, but the extra money employees get above the minimum wage decreases. This means employees don't work harder even with higher wages. Different wage levels can change how employees react to their pay.