The employment and redistributive effects of reducing or eliminating minimum wage tip credits

Bibliographic Data

ID11684390
AuthorsDavid Neumark (0000-0002-7681-1884, University of California‐Irvine Department of Economics Irvine California USA, corresponding author), Maysen Yen (Office of the Comptroller of the Currency Washington, DC USA)
Year2022
Volume42
Issue4
Pages1092-1116
Publication date2022-11-15
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueJournal of Policy Analysis and Management (JOURNAL)
Journal identifiersISSN: 0276-8739 • E-ISSN: 1520-6688
PublisherWiley (PUBLISHER • GB)
DOI10.1002/pam.22450
OpenAlexW4309047970
LanguageEN
Citations received2
References cited30

Recent policy debate on minimum wages has focused not only on raising the minimum wage, but on eliminating the tip credit for restaurant workers. We use data on past variation in tip credits—or minimum wages for restaurant workers—to provide evidence on the potential impacts of eliminating (or reducing) the tip credit. Our evidence points to higher tipped minimum wages (smaller tip credits) reducing jobs among tipped restaurant workers, without positive earnings effects on those who remain employed sufficiently large to raise total earnings in this sector. And most of our evidence provides no indication that higher tipped minimum wages would be well targeted to poor or low‐income families or reduce the likelihood of being poor or very low income

Earnings · Economics · Labour economics · Minimum wage · Wage · Emotional Labor in Professions · Occupational and Professional Licensing Regulation · Psychology of Social Influence · Finance

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