Minimum Wage effects on support for Universal Basic Income and Redistribution

Last registered on October 28, 2024

View Trial History

Pre-Trial

Trial Information

General Information

Title

Minimum Wage effects on support for Universal Basic Income and Redistribution

RCT ID

AEARCTR-0014629

Initial registration date

October 22, 2024

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

October 28, 2024, 1:00 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country

United States of America

Region

Primary Investigator

Name

Timothy Schaitberger

Affiliation

King's College London

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Eddy Yeung

PI Affiliation

Emory University

Contact Investigator

Additional Trial Information

Status

In development

Start date

2024-10-23

End date

2024-10-29

Keywords

Behavior, Governance, Labor, Welfare

Additional Keywords

minimum wage, universal basic income

JEL code(s)

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

In previous decades of rising economic inequality, the developed world saw various local, regional, and even national governments enact regulatory new or higher minimum wage policies to increase wages for those at the bottom of the income ladder. More recently, other government programs are testing universal basic income (UBI) payment to fight poverty. Both a minimum wage and UBI will require public support for plausible implementation, and both are forms of redistribution that don’t rely on means tested welfare benefits. Political and economic literature suggests numeric anchoring of a policy can influence public preferences, and even a policy proposal frame can shape individual preferences for adjacent policies. This raises the question of how a higher proposed minimum wage affects support for the wage floor and other forms of redistribution, such as UBI. We posit an increase in minimum wage can influence public attitudes, specifically a large monetary increase in the wage floor will reduce support for other economic redistribution policies, including UBI. A randomized choice experiment will test these theories by assigning American respondents to different informational treatments. Our experimental design allows us to estimate two contributions to the literature. First, we examine the causal effects of anchoring the federal minimum wage proposals on public attitudes toward the wage floor. Second, we will explore how minimum wage increases lead to spillover effects on public support for UBI and other redistributive policies.

External Link(s)

Registration Citation

Citation

Schaitberger, Timothy and Eddy Yeung. 2024. "Minimum Wage effects on support for Universal Basic Income and Redistribution." AEA RCT Registry. October 28. https://doi.org/10.1257/rct.14629-1.0

Sponsors & Partners

Experimental Details

Interventions

Intervention(s)

Our research design employs a choice experiment between a current and proposed public policy, with an increase to the federal minimum wage as the proposed policy treatment (Elias et al., 2019; Lennon et al., 2022). We diverge from the work of Lennon et al. by testing wage floor preferences, expectations, and support for other redistributive policies, without any prompting of unemployment effects.
Each participant will receive either the reference or a treatment (see Table 1). Experimental treatments will increase by $3, incrementally going from $10.25 to $19.25. Questions regarding the minimum wage policy will be presented.

Next, treatment groups will be asked to imagine either the current policy is maintained or one of the alternative policies is enacted (see Figure 1 and Table 2), with the reference group prescribed as the current US federal minimum wage. Then questions about UBI and redistribution will be presented.

Intervention (Hidden)

Intervention Start Date

2024-10-23

Intervention End Date

2024-10-28

Primary Outcomes

Primary Outcomes (end points)

Our dependent variable, participant preferences for minimum wage and economic redistribution, is rooted in this decision analysis between a current policy and a policy proposal. After the choice is presented, the preferences for the competing wage systems will be recorded. This includes asking participants to compare the current federal minimum wage policy to one of the alternative policies regarding their preferred federal wage floor, expected unemployment effects, and preference for states or cities having their own minimum wage.

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

After this policy prescription, participants will be asked additional questions related to economic redistribution and UBI. An attention check question is also asked to ensure compliance and reinforce the monetary figures within the experiment. Overall survey tools such as numeric-textbox, slider and Likert scale questions should provide robust evidence of the anchoring effects of a proposed regulatory wage floor. A sample of the experiment can be found here: https://kclbs.eu.qualtrics.com/jfe/form/SV_4UEmTL7GkY6fc7I.

Secondary Outcomes (explanation)

Experimental Design

American citizens aged 18+ will be the study population. We will recruit 2,000 from the general adult US population using the platform Prolific, sampling for age, gender and political beliefs representative of the general US population. Participants will be redirected to the Qualtrics platform to begin the survey. Qualtrics employs a function to divide participants to different treatment groups with an equal probability, ensuring fair and equal randomization.

Each participant will receive either the reference or a treatment (see Table 1). A reference group of $7.25 will be used for the current U.S. minimum wage. Experimental treatments will increase by $3, incrementally going from $10.25 to $19.25. Questions regarding the minimum wage policy will be presented. After this policy prescription, participants will be asked additional questions related to economic redistribution and UBI. An attention check question is also asked to ensure compliance and reinforce the monetary figures within the experiment.

Experimental Design Details

Randomization Method

Qualtrics employs a function to divide participants to different treatment groups with an equal probability, ensuring fair and equal randomization.

Randomization Unit

One minimum wage policy will be given to each participant ($7.25, $10.25, $13.25, $16.25, $19.25). Each policy will be evening distributed at 20% of the total participants.

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

1 treatment arm consisting of a choice experiment.

Sample size: planned number of observations

2,000 total observations of 1 trial per 1 participant.

Sample size (or number of clusters) by treatment arms

2,000 participants

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

A power study of the results for effects on wage floor support along with spillover effects on UBI and other redistributive support was conducted. A power estimate of 0.8 and an alpha of 0.05 was used with the coefficient and standard deviation for each dependent variable of interest, with the STAT 18.0 power analysis tool to produce a total N required based on the pilot study data. The N total observations required for a MDE to either reject or accept the null hypothesis, based on the pilot study data, for each variable of interest is seen in the right most column of Table 3 below. We find that 5 out of 6 dependent variables will likely be detectable at 788 participants, while support for UBI will require a larger sample size. Due to limited funding, we chose a total sample of 2,000 participants with the understanding this might not provide an effect on support for a UBI support.

Supporting Documents and Materials

IRB