TY - JOUR
T1 - Minimum Wage and Individual Worker Productivity
T2 - Evidence from a Large US Retailer
AU - Coviello, Decio
AU - Deserranno, Erika
AU - Persico, Nicola
N1 - Publisher Copyright:
© 2022 The University of Chicago. This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License (CC BY-NC 4.0), which permits non-commercial reuse of the work with attribution. For commercial use, contact [email protected]. Published by The University of Chicago Press.
PY - 2022/9
Y1 - 2022/9
N2 - We study workers who are employed by a large US retailer, work in many store locations, and are paid based on performance. By means of a border-discontinuity analysis, we document that workers become more productive and are terminated less often after a minimum wage increase. These effects are stronger among workers whose pay is more often supported by the minimum wage. However, when workers are monitored less intensely, the minimum wage depresses productivity. We interpret these findings through an efficiency wage model. After a minimum wage increase, profits decrease, and a calibration exercise suggests that worker welfare increases.
AB - We study workers who are employed by a large US retailer, work in many store locations, and are paid based on performance. By means of a border-discontinuity analysis, we document that workers become more productive and are terminated less often after a minimum wage increase. These effects are stronger among workers whose pay is more often supported by the minimum wage. However, when workers are monitored less intensely, the minimum wage depresses productivity. We interpret these findings through an efficiency wage model. After a minimum wage increase, profits decrease, and a calibration exercise suggests that worker welfare increases.
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U2 - 10.1086/720397
DO - 10.1086/720397
M3 - Article
AN - SCOPUS:85138484978
SN - 0022-3808
VL - 130
SP - 2315
EP - 2360
JO - Journal of Political Economy
JF - Journal of Political Economy
IS - 9
ER -
