It’s a haphazard way of paying workers, and yet it keeps expanding. With federal tax policy shifting in a pro-tip direction, we revisit an episode from 2019 to find out why. <ul><li>SOURCES:<ul><li><a href="https://economics.uchicago.edu/directory/john-list">John List</a>, economist at the University of Chicago.</li><li><a href="https://sha.cornell.edu/faculty-research/faculty/wml3/">Michael Lynn</a>, professor of consumer behavior and marketing at Cornell University’s School of Hotel Administration.</li><li><a href="https://rady.ucsd.edu/people/faculty/gneezy/">Uri Gneezy</a>, economist at the University of California, San Diego’s Rady School of Management.</li><li><a href="https://www.ushgnyc.com/team_member/danny-meyer/">Danny Meyer</a>, founder of Union Square Hospitality Group, and founder and chairman of the board of Shake Shack.</li></ul></li></ul> <ul><li>RESOURCES:<ul><li>"<a href="https://www.nytimes.com/2025/05/21/dining/no-tax-on-tips-bill.html">How ‘No Tax on Tips’ Will Affect Waiters, Drivers and Diners</a>," by Julia Moskin (New York Times, 2025).</li><li>“<a href="https://ideas.repec.org/p/feb/natura/00680.html">The Drivers of Social Preferences: Evidence from a Nationwide Tipping Field Experiment</a>,” by Bharat Chandar, Uri Gneezy, John List, and Ian Muir (The National Bureau of Economic Research, 2019).</li><li>“<a href="https://ideas.repec.org/p/feb/natura/00681.html">Design and Analysis of Cluster-Randomized Field Experiments in Panel Data Settings</a>,” by Bharat Chandar, Ali Hortacsu, John List, Ian Muir, and Jeffrey Wooldridge (The National Bureau of Economic Research, 2019).</li><li>“<a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/joca.12171">The Effects of Tipping on Consumers’ Satisfaction with Restaurants</a>,” by Michael Lynn (The Journal of Consumer Affairs, 2018).</li><li>“<a href="https://voices.uchicago.edu/jlist/research/charitable-giving/">The Importance of Being Marginal: Gender Differences in Generosity</a>,” Stefano DellaVigna, John List, Ulrike Malmendier, and Gautam Rao (The American Economic Review,  2013).</li><li>“<a href="https://ecommons.cornell.edu/items/042e8740-5c44-486e-ab28-00f05781d153">Restaurant Tipping and Service Quality: A Tenuous Relationship</a>,” by Michael Lynn (The Cornell Hotel and Restaurant Administration Quarterly, 2001).</li></ul></li></ul> <ul><li>EXTRAS:<ul><li>“<a href="https://freakonomics.com/podcast/danny-meyer/">The No-Tipping Point</a>,” by Freakonomics Radio (2016).</li><li>“<a href="https://freakonomics.com/podcast/should-tipping-be-banned-a-new-freakonomics-radio-podcast/">Should Tipping Be Banned?</a>” by Freakonomics Radio (2013).</li></ul></li></ul>

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