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 Consu…