Minimum Wages and Gift-Exchange

Last registered on June 01, 2021


Trial Information

General Information

Minimum Wages and Gift-Exchange
Initial registration date
May 31, 2021

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
June 01, 2021, 10:26 AM EDT

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



Primary Investigator


Other Primary Investigator(s)

Additional Trial Information

On going
Start date
End date
Secondary IDs
Economists differ in their views on how minimum wage legislation affect labor markets, but often neglect the behavioral responses of workers in this debate. Arguably, workers may reciprocate higher labor costs for the employer by putting in higher efforts, which could explain why minimum wages are not necessarily detrimental for firms. According to research on gift-exchange at the workplace, the prerequisite for such reciprocal behavior is the voluntariness underlying a wage hike. Do workers reciprocate a wage increase that does not exclusively follow the intent of the employer?
In this paper, we conduct the first comprehensive investigation into the behavioral effects of minimum wages at the individual level and outside the laboratory. In study 1, a set of coincidental events surrounding a research project at a university allow us to credibly manipulate information on motives behind a substantial pay increase. Using data on workers’ effort levels and perceptions of the employer, we test the idea of gift-exchange in a context in which workers learn about lacking voluntariness behind their pay increase. In study 2, we inspect the generalizability of our findings by running a controlled survey experiment with hypothetical company settings. We analyze worker behavior when receiving a pay increase due to minimum wage policies, compared to a voluntary pay increase and compared to a baseline with no pay increase.
External Link(s)

Registration Citation

Chadi, Adrian. 2021. "Minimum Wages and Gift-Exchange." AEA RCT Registry. June 01.
Experimental Details


Intervention Start Date
Intervention End Date

Primary Outcomes

Primary Outcomes (end points)
Worker effort, fairness perceptions
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Voluntary pay increase vs. pay increase due to minimum wage vs. involuntary pay increase (study 1),
No pay increase vs. pay increase due to minimum wage vs. voluntary pay increase (study 2)
Experimental Design Details
In study 1, we exploit a work scenario that gives us the opportunity to inspect individual behavior of workers after manipulating information about why they get more pay, suggesting different intentions of the employer (i.e. a lack of voluntariness in the employer’s pay decision vs. a voluntary decision). Due to a series of coincidental events, this real world case allows us to credibly vary information about an employer’s decision-making without deceiving people. The concrete background is a large-scale research project at a research institute connected to a German university where casual workers conducted telephone interviews for a representative nation-wide survey. Due to the implementation of a new minimum wage in Germany in January 2015, a lack of clarity about the legal background of the project occurred. The project leadership was requested by the university to solve a possible conflict between the level of pay and the new minimum wage law, in consequence of which the project leadership increased compensation for the interviewers by paying an extra amount of money for participation in a follow-up online survey. To use this situation for an investigation into the behavioral effects of minimum wages, we varied the level of information on why the project leadership was willing to pay an extra amount of money. During the online survey, a randomly selected group of interviewers could read on their screens that the payment decision was because the employer was requested to do so by others with an explicit reference to the new minimum wage law in Germany (minimum wage treatment). Crucially, this information was not given to individuals in the control group (fair wage treatment). Thereby, we test whether lacking voluntariness underlying the wage hike, in the context of a minimum wage, impairs the reciprocal behavior of workers in comparison to a pure gift-exchange scenario. Meanwhile, a third group of randomly selected interviewers could read a slightly different information treatment that mentioned the lack of voluntariness in the employer’s pay decision but included no reference to the minimum wage (exogenous generosity treatment). The idea of this treatment is to explain why exogenous interventions into wage policies might be able to impair reciprocal behavior by focusing on the lack of intent behind the pay increase. By using data from the online survey itself, we inspect the economic outcomes as well as potential transmission channels of our manipulation. First and foremost, we examine individual effort in a task, as participants were asked to do a vignettes questionnaire on hypothetical choices at work. Each interviewer was asked to do a certain number of vignettes, but generally could make a completely voluntary decision on the level of effort. In such a gift-exchange setting, which emerges from the presence of a monetary gift while effort cannot be enforced, we expect a strong role of fairness perceptions. To investigate the role of perceptions as the potential transmission channel of reciprocal behavior, we analyze responses to subjective questions on how workers assess their employer, and we complement our analysis by using data on reservation wages from the survey.
In study 2, we implement various hypothetical work scenarios as part of a controlled survey experiment. Survey participants assess the probability of a positive reciprocal behavior by answering a question on the expected effort of a hypothetical worker. This allows us to test whether pay increases due to minimum-wage policies can be considered as a positive factor in effort levels, compared to a baseline with a stable wage level. Furthermore, we can compare the potential behavioral implications of a pay increase due to minimum-wage legislation to a pure gift-exchange scenario of a pay increase voluntarily induced by the employer. By inspecting varying work scenarios, reflecting real-world contexts, we can learn more about the external validity of our findings on minimum wages and gift-exchange. Specifically, we are interested in comparing work scenarios with i) more or less personal relationships due to varying workforce sizes and ii) virtual vs. non-virtual work contexts. We make use of a coordination game to create incentives for survey participants to provide valid responses. Adding to our main question on effort levels of a hypothetical worker, we also ask respondents about fairness perceptions, as the potential mechanism behind effort responses, and about their own behavior (non-incentivized). Finally, we gather additional survey data that for instance allow distinguishing between individuals with regard to their attitudes towards minimum wages. This could play a role for responses regarding self-reported individual effort levels. Another issue could be the employment status of the survey participants, since, for example, self-employed individuals may have particularly negative views on minimum-wage policies.
Randomization Method
Randomization Unit
Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters
No clusters
Sample size: planned number of observations
100+ (study 1), 1200+ (study 2)
Sample size (or number of clusters) by treatment arms
3 treatment conditions with 30+ individuals each (study 1),
3 treatment conditions with 400+ individuals each (study 2)
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number


Post Trial Information

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Is the intervention completed?
Data Collection Complete
Data Publication

Data Publication

Is public data available?

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials