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Minimum wages, morality, and efficiency: A choice experiment

AEA Papers and Proceedings. May 1, 2019

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We use a choice experiment to examine public support for minimum wages. We first elicit respondents’ moral assessment of two labor market systems: one with a minimum wage and one without. Then, we present four pairs of hypothetical employment outcomes and ask respondents to “vote.” Our estimates suggest that the average respondent requires a 4.65 percentage point reduction in unemployment before they would support a system without a minimum wage. We also find that equity matters; respondents are 11.1 percentage points less likely to support a minimum wage if it disproportionately affects minorities and females.