Excited to see my JMP cited in the Economist—it highlights the tradeoffs workers could face with a higher minimum wage and suggests more worker protections like Fair Workweek laws could be important alongside minimum wage increases
www.economist.com/finance-and-...
Contributions: I show that service-sector schedules are highly unpredictable and that firms pass risk onto workers through this margin. Predictability declines after minimum wage hikes, and rising extreme weather will increase not only lost hours but also their uncertainty.
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Responsiveness to extreme weather days also increases following an increase in the minimum wage. When it becomes costlier for a business to keep workers on a shift when their productivity is not maximized, like on a slow-business day, schedules are more frequently adjusted at the last-minute.
Most workers in this setting earn near the minimum wage. I next show that a large wage hike increases schedule unpredictability: schedule inaccuracy rises about 45 min per week, and weekly hours become about 4 hours more variable, indicating firms adjust along this margin to offset higher wages.
Second, I show that business uncertainty contributes to schedule unpredictability. Using weather shocks that are known to reduce demand, I find schedule inaccuracy rises on very hot, cold, or rainy days, indicating firms shift the risk of slow days onto workers.
I also take advantage of the fact that I can follow workers across businesses in my data to show that the observed scheduling unpredictability is a business-specific characteristic and does not appear to be largely driven by worker preferences.
I use a large administrative dataset with workers’ planned schedules, hours worked, and wages. I first show that schedule unpredictability is widespread: last-minute changes are common, weekly hours fluctuate, and the lowest-wage, least-tenured workers face the most instability.
I’m on the #EconJobMarket! I study labor, extreme weather adaptation, and inequality.
My JMP addresses an under-studied aspect of the labor market: schedule unpredictability among hourly workers in the service sector.
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