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Measuring Preferences for CompetitionBy:Lina Lozano; Ernesto Reuben (Division of Social Science)

Abstract:Recent research has found that competitive behavior measured in experiments strongly predicts individual differences in educational and labor market outcomes. However, there is no consensus on the underlying factors behind competitive behavior in these experiments. Are participants who compete more capable, more confident, and more tolerant of risk, or are they competing because they enjoy competition per se? In this study, we present an experiment designed to measure individuals’ preferences for competition. Compared to previous work, our experiment rules out risk preferences by design, measures beliefs more precisely, and allows us to measure the magnitude of preferences for competition. In addition, we collect multiple decisions per participant, which lets us evaluate the impact of noisy decision-making. We find strong evidence that many individuals possess preferences for competition. Most participants are either reliably competition-seeking or competition averse, and their choices are highly consistent with expected utility maximization. We also find that preferences for competition depend on the number of competitors but not on the participants’ gender.Date:2022–08URL:http://d.repec.org/n?u=RePEc:nad:wpaper:20220078&r=

Does the Minimum Wage Affect Wage Inequality? A Study for the Six Largest Latin American EconomiesBy:Carlo Lombardo(CEDLAS-IIE-FCE-UNLP & CONICET); Lucía Ramirez-Veira (CEDLAS-IIE-FCE-UNLP & CONICET); Leonardo Gasparini (CEDLAS-IIE-FCE-UNLP & CONICET)

Abstract:

Minimum wage (MW) policies are widespread in the developing world and yet their effects are still unclear. In this paper we explore the effect of national MW policies in Latin America’s six largest economies by exploiting the heterogeneity in the bite of the national minimum wage across local labor markets and over time. We find evidence that the MW has a compression effect on the wage distribution of formal workers. The effect was particularly large during the 2000s, a decade of sustained growth and strong labor markets. In contrast, the effect seems to vanish in the 2010s, a decade of much weaker labor markets. We also find suggestive evidence of a lighthouse effect: the MW seems to have an equalizing effect also on the wage distribution of informal workers.JEL:J22 J31 J38 K31

:http://d.repec.org/n?u=RePEc:dls:wpaper:0302&r=