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Tipped Wage Effects on Earnings and Employment in Full-Service Restaurants

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  • Sylvia Allegretto
  • Carl Nadler

Abstract

type="main" xml:id="irel12108-abs-0001"> We exploit more than 20 years of changes in state-level tipped wage policy and estimate earnings and employment effects of the tipped wage using county-level panel data on full-service restaurants (FSR). We extend earlier work by Dube, Lester, and Reich ( ) and compare outcomes between contiguous counties that straddle a state border. We find a 10-percent increase in the tipped wage increases earnings in FSRs about 0.4 percent. Employment elasticities are sensitive to the inclusion of controls for unobserved spatial heterogeneity. In our preferred models, we find small, insignificant effects of the tipped wage on FSR employment.

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  • Sylvia Allegretto & Carl Nadler, 2015. "Tipped Wage Effects on Earnings and Employment in Full-Service Restaurants," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 54(4), pages 622-647, October.
    • Handle: RePEc:bla:indres:v:54:y:2015:i:4:p:622-647
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    File URL: http://hdl.handle.net/10.1111/irel.2015.54.issue-4
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    Cited by:

    1. Joseph J. Sabia & Richard V. Burkhauser & Taylor Mackay, 2018. "Minimum Cash Wages, Tipped Restaurant Workers, and Poverty," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 57(4), pages 637-670, October.

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