Why Does Tipping Still Exist? (Update)

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. SOURCES:John List, economist at the University of Chicago.Michael Lynn, professor of consumer behavior and marketing at Cornell University’s School of Hotel Administration.Uri Gneezy, economist at the University of California, San Diego’s Rady School of Management.Danny Meyer, founder of Union Square Hospitality Group, and founder and chairman of the board of Shake Shack. RESOURCES:"How ‘No Tax on Tips’ Will Affect Waiters, Drivers and Diners," by Julia Moskin (New York Times, 2025).“The Drivers of Social Preferences: Evidence from a Nationwide Tipping Field Experiment,” by Bharat Chandar, Uri Gneezy, John List, and Ian Muir (The National Bureau of Economic Research, 2019).“Design and Analysis of Cluster-Randomized Field Experiments in Panel Data Settings,” by Bharat Chandar, Ali Hortacsu, John List, Ian Muir, and Jeffrey Wooldridge (The National Bureau of Economic Research, 2019).“The Effects of Tipping on Consumers’ Satisfaction with Restaurants,” by Michael Lynn (The Journal of Consumer Affairs, 2018).“The Importance of Being Marginal: Gender Differences in Generosity,” Stefano DellaVigna, John List, Ulrike Malmendier, and Gautam Rao (The American Economic Review,  2013).“Restaurant Tipping and Service Quality: A Tenuous Relationship,” by Michael Lynn (The Cornell Hotel and Restaurant Administration Quarterly, 2001). EXTRAS:“The No-Tipping Point,” by Freakonomics Radio (2016).“Should Tipping Be Banned?” by Freakonomics Radio (2013). Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.