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Abstract This study examines factors that influence an individual's preference on the minimum wage policy. People hold striking misperception about minimum wage bindingness. This project studies whether individuals would change their support for minimum wages if their misperceptions are corrected. Second, this survey explores an individual's exposure to unemployment and their support for the minimum wages. How do people reason and decide when it comes to voting for minimum wage increases? Do low-wage workers think that the higher rate, the better, or do they take into account disemployment effects of minimum wages while making their policy choices? For high-wage workers who would not be affected by the increases, do they care more about workers, small businesses, or the overall economy? In addition, are those factors different between liberal and conservative individuals? My study will shed some light on the mental maps that determine individuals' support for minimum wages. To further investigate those channels, I implement information provision treatments: providing people information on the bindingness of the minimum wage in their state and the unemployment rate in their state. Finally, to shed some light on the link between perceptions on the labor markets and policy choices, I implement a hypothetical experiment to study whether people would demand a higher minimum wage rate or a lower minimum wage rate when the economy is not doing well or under crisis.
Trial Start Date April 15, 2024 May 02, 2024
Trial End Date April 26, 2024 May 20, 2024
JEL Code(s) P00, D00
Last Published April 02, 2024 12:47 PM April 30, 2024 08:44 PM
Intervention (Public) Information treatment Information provision treatment and hypothetical treatment.
Intervention Start Date April 15, 2024 May 02, 2024
Intervention End Date April 26, 2024 May 20, 2024
Primary Outcomes (End Points) Preferred minimum wage. Dummy variable = 1 if they vote to increase the minimum wage. Preferred minimum wage: people are asked what would be a good minimum wage in their state Voting decision for a small minimum wage increase: dummy = 1 if they prefer a $2 increase over the status quo Voting decision for a medium minimum wage increase: dummy = 1 if they prefer a $5 increase over the status quo Voting decision for a large minimum wage increase: dummy = 1 if they prefer a $8 increase over the status quo
Experimental Design (Public) This survey experiment provides information about minimum wage workers to study the effects on individuals' preferences on the policy. Moreover, a group of respondents will be put under some hypothetical scenarios with different unemployment rate. I then compare the support for the policy between the control group and groups with different unemployment rates. My survey experiment is created using Qualtrics and distributed to their representative panel of respondents. Individuals who agree to participate in the survey will be asked a series of background socio-economic questions and political affiliation questions. In addition, I ask questions to measure their optimism about their career prospect depending on whether they are actively working, unemployed, or not in the labor force. Next, all respondents will be asked an open-ended question about minimum wage to elicit first ordered concerns. They can write whatever comes to their mind regarding the policy. I then elicit everyone's beliefs on minimum wage workers by asking what percentage of hourly workers making less than or equal to the state minimum wage. An equal number of respondents are randomly put into a control group and three different treatment groups. In the control group, respondents go straight to questions about policy choices and assessment. In the first information treatment group, people are given an information about the number of hourly workers whose wage is equal to or less than the state minimum wage out of every 100 hourly workers in their state based on the most recent survey data from the Current Population Survey. They are then given another opportunity to reassess their answer to this question. I do this to elicit their posterior beliefs to take this into account when analyzing the information effects. Next, they are asked the same set of questions regarding policy choices as in the control group. In the second information treatment group, I provide them with information on the unemployment rate in their state and elicit prior and posterior beliefs. I then ask them again the questions about their career prospects. Lastly, they are asked policy questions. In the hypothetical treatment group, I ask for their perceptions on the unemployment rate in their state, then ask them to think about a hypothetical scenario where the unemployment rate is higher. Then they are asked to answer questions about career prospects and policy choices taking into account the hypothetical scenario.
Sample size (or number of clusters) by treatment arms 500 control, 500 treatment 1, 1000 treatment 2 500 control, 500 information treatment 1, 500 information treatment 2, 500 hypothetical treatment.
Additional Keyword(s) minimum wage, expectation minimum wage, expectation, political economy
Intervention (Hidden) Information treatment: Percentage of people whose wages are lower or equal to the state minimum wage. Treatment 2: respondents are put under each hypothetical scenario about the unemployment rates. First information treatment: I provide a random set of respondents with information about the percentage of hourly workers in their state who make less than or equal to the state minimum wage. Second information treatment: I provide a random set of respondents with information about the unemployment rate in their state. Hypothetical treatment: I ask a random set of respondents to think about a crisis like Covid that results in an increase in the unemployment rate in their state and answer questions about policy choices.
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