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Topics on Labor and Public Policy

Living wage laws are a common local government policy to mandate higher wages for a subsection of the labor market. Advocates of these policies suggest the higher mandated wage will
lead to greater effort contrary to predictions made by reciprocity models. Do workers actually reciprocate effort for a mandated wage increase if the intention is not purely kind? In one
chapter, I use a gift exchange game - where effort is not contractible - to examine worker effort response and possible wage spillovers from a living wage law. The main result shows the
greatest influence on effort is the wage offered - regardless of the context of any manager wage restriction. Therefore, effort increases as the mandated wage increases from a typical
minimum wage to the higher living wage. Additionally, wage spillovers in the living wage environment push unaffected managers to offer higher wages than otherwise offered in a market with
only a single minimum wage. Various theories provide contradictory predictions for the impact of living wage laws on employment. Using a unique and hierarchal dataset with employment data
from all Florida business establishments, I analyzes changes at both the market and establishment level where a number of fixed effects can be used to isolate the employment change.
Results suggest that there is no to little negative employment change at the market level for areas with a living wage law and a small positive employment effect for establishments with a
living wage contract. Finally, I extend reciprocity models to examine contract design. Theoretically, contracts are typically modeled as a one-time transaction. In practice, contracts are
rarely one-shot interactions. Short-term contracts are renewed and long-term contracts are terminated early. Despite the possibility for contract length to be identical, behavioral
preferences may encourage better performance and longer relationships depending on the initial agreed contract length. Using experimental contracts, we find that only when contract length
can be determined endogenously does performance differ between contract and that reciprocity plays an important role in this labor relationship. / A Dissertation submitted to the Department of Economics in partial fulfillment of the requirements for the degree of Doctor of Philosophy. / Fall Semester 2015. / November 10, 2015. / Includes bibliographical references. / David J. Cooper, Professor Directing Dissertation; Richard Feiock, Outside Committee Member; Christopher Clapp, Committee Member; John Hamman, Committee
ContributorsCromwell, Erich W. (authoraut), Cooper, David Jacob, 1966- (professor directing dissertation), Feiock, Richard C. (outside committee member), Clapp, Christopher M. (Christopher Marshall) (committee member), Hamman, John R. (committee member), Florida State University (degree granting institution), College of Social Sciences and Public Policy (degree granting college), Department of Economics (degree granting department)
PublisherFlorida State University
Source SetsFlorida State University
LanguageEnglish, English
Detected LanguageEnglish
TypeText, text
Format1 online resource (136 pages), computer, application/pdf

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