Are We Teaching Outside the Box? A National Survey on Teaching the Minimum Wage in Undergraduate Economics Classes

Abstract

The purpose of this paper is to study how professors in the US teach about the minimum wage. Results of a survey suggest that almost all instructors cover the topic of minimum wage in their introductory courses and tend to cover this topic in a similar manner to how it is covered in introductory textbooks: by focusing on the employment effects of the minimum wage in the neoclassical model. In addition, instructors have relatively conservative views about the minimum wage effect and tend to agree that the minimum wage negatively impacts low-skilled workers. Finally, there seems to be a small “liberal bias” where instructors who are in favor of the minimum wage are less likely to teach the standard labor supply-demand model, and a larger “conservative bias” where instructors who tend to believe in the negative impact of a minimum wage are less likely to discuss the assumption of monopsony in the labor market.

Keywords:

• minimum wage economic education
• undergraduate teaching
• pedagogy

JEL Classification:

• A1
• A22
• J0
• J39

Acknowledgements

I would like to thank Johan Rundquist for his research assistance and the survey participants for their time and feedback. In addition I would like to thank Udayan Roy, Nancy Frye, and Andrea McLoughlin as well as the anonymous referees and the editor for their helpful comments and suggestions.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1 It should be pointed out that the focus of the survey used in this paper is on the alternative interpretations of how the minimum wage impacts the labor market within the mainstream economics. The results of this survey suggest that even within this narrowly defined debate, many instructors tend to emphasize the negative employment effect of the minimum wage and less than a third discuss the issue of monopsony in a labor market.

2 Unfortunately, only a handful of departments provided such a list.

3 These descriptive statistics are very similar to those reported by Watts and Becker (2008).

4 The survey was also piloted with a small group of professors working at different institutions.

5 A few participants also commented that at their institutions they do not have a tenure track option even for full-time professors and that this option was not available in the survey. In addition, a few participants commented that they would prefer to opt out of the demographics questions in the survey due to the fear that this might lead to personal identification, but this was not given as an option.

6 The results for the upper level courses are more difficult to interpret, since many of the upper level courses (e.g. international finance, econometrics, etc.) typically do not address the topic of the minimum wage, and professors who do teach about the minimum wage might do that for various reasons. For completeness, the results for the upper level courses are reported in Table C in the appendix.

7 Unfortunately, the survey did not specifically ask about what empirical evidence or what estimates the instructors are using. The majority of textbooks emphasize that a 10% increase in the minimum wage leads to a 1–3% decrease in the employment rate of unskilled workers, and this estimate most likely comes from Brown et al. (1982). However, there is a wide range of estimates measuring the impact of raising the minimum wage and the labor economists are hardly in agreement of the quantitative impact of the minimum wage on unemployment. It seems that when discussing these empirical estimates the most important point is the fact the even the experts in the field do not agree on any particular estimates.

8 The survey did not ask about what estimates the instructors use; only if they discuss any estimates in class.

9 The problem with question 14 is that it is a double-barreled question; it asks about (1) comprehensive and (2) unbiased treatment of the minimum wage in one question. As a result, when a participant is, for example, strongly agreeing with the statement, it is not clear if she is doing so because she believes that she is (1) providing comprehensive treatment of the topic or (2) providing an unbiased treatment of the topic or (3) both. In retrospect, this question should have been asked as two separate questions and been better phrased.

10 The IGM consists of a panel of expert economists. By design, the top seven economics departments in the US are equally represented. In addition, the panel includes economists from different cohorts, women as well as men, members of different political persuasions, and from varying geographic areas. Several times a year, the panel is asked to respond to a statement expressing a particular view on an economic question of current interest. Many researchers have been using the responses to these questions to evaluate the level of (dis)agreement among economists. See, for example, Gordon and Dahl (2013) and Sapienza and Zingales (2013).

11 In addition, the IGM survey offered the “no opinion” option, while this survey did not.

12 It is true that in the IGM survey, participants had an option to choose “no opinion” and 3% did in fact do so, while in this survey the participants were “forced” to take a stand. This could contribute to the differences between the two surveys. However, most likely if those 3% of the EEP participants were forced to take a stand, it could be conjectured that they would tend to opt for the “uncertain” option, therefore making the EEP survey even more neutral, compared to this survey’s results.

13 Interestingly, female instructors are more likely to teach about the impact of elasticities on the size of unemployment (positive and statistically significant coefficient in Regression 3).

14 A couple of survey participants stated that they avoid using the minimum wage example in the context of the price floor because it is not complex enough to give the topic a proper treatment.

15 Native English speakers are also more likely to discuss empirical evidence about labor supply and demand elasticities (positive coefficient in Regression 4).