Advanced Search
MyIDEAS: Login to save this article or follow this journal

The Effect of the Tipped Minimum Wage on Employees in the U.S. Restaurant Industry

Contents:

Author Info

  • William E. Even

    ()
    (?Raymond E. Glos Professor of Economics, Department of Economics, Miami University, Oxford, OH 45046, USA;)

  • David A. Macpherson

    ()
    (E.M. Stevens Professor of Economics, Department of Economics, Trinity University, One Trinity Place, San Antonio, TX 78212, USA; corresponding author.)

Abstract

According to federal law in 2013, employers can take a credit of up to $5.12 for tips received by workers in satisfying the minimum-wage requirement of $7.25. This article uses interstate variation in laws regarding tip credits and minimum wages to identify the effects of reducing or eliminating the tip credit on employment, hours, and earnings in the U.S. restaurant industry. Using data from the Quarterly Census of Employment and Wages and the Current Population Survey, we find that a reduction in the tip credit increases weekly earnings but reduces employment in the full-service restaurant industry and for tipped workers. The results are robust to controls for spatial heterogeneity in employment trends and are supported by a series of falsification tests.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://dx.doi.org/10.4284/0038-4038-2012.283
Download Restriction: no

Bibliographic Info

Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 80 (2014)
Issue (Month): 3 (January)
Pages: 633-655

as in new window
Handle: RePEc:sej:ancoec:v:80:3:y:2014:p:633-655

Contact details of provider:
Web page: http://www.southerneconomic.org/
More information through EDIRC

Related research

Keywords:

Find related papers by JEL classification:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:sej:ancoec:v:80:3:y:2014:p:633-655. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laura Razzolini).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.