How Unfair Chances and Gender Discrimination Affect Labor Supply (Job Market Paper)
(Working Paper almost ready, with K. Bosmans and A. Riedl)
We investigate the causal impact of unfair chances stemming either from an unspecified source or from gender discrimination on a primary labor decision for workers: their ensuing labor supply at a given wage. We conduct an experiment in which workers individually engage in the same task for a fixed piece-rate wage. Workers are assigned to payment schemes with equal wages or with unequal wages generated through fair chances, unfair chances based on an unspecified source, or gender-discriminatory chances. Relatively low wages resulting from gender-discriminatory chances substantially reduce labor supply compared to equal low wages (–22%). The decrease is twice as large as the ones induced by low wages coming from fair chances and unfair chances based on an unspecified source. For workers with relatively high wages, all schemes generate similar labor supply. Our results highlight a novel supply-side effect of gender discrimination in labor markets.
Reciprocity under Brief and Long Time Delays
(Resubmitted at Economic Inquiry, Updated Working Paper on demand, with C. N. Noussair)
We report the results from three experiments embedded in the same overarching design, which extends the Gift Exchange paradigm for the study of worker-employer relationships. We focus on the effect of the length of the delay, between the time at which workers learn their wage and when they choose an effort level, on the relationship between wage and effort. We compare effort choices made within a few hours after workers learn their wage, with those made several weeks afterward. Our two effort choices are single “cold” choices, but the varying delay allows us to identify any dissipation of reciprocal behavior. We find that the strength of the wage-effort relationship decreases over time, and this change appears to be driven by those workers who receive low wages. We extend our study of delays to the wage-effort relationship below self-reported fair wages. Our findings suggest that workers’ inclination to punish stingy employers weakens over time.
Inequality of Chances: Ex-Ante Fairness and Individual Control
(Working Paper on demand, with L. Micheli)
Unequal financial outcomes often originate from unequal chances in societies. Yet, compared to outcomes, little is known about how individuals perceive unequal distributions of chances. We investigate empirically the role of different sources of unequal chances in shaping perceptions of inequality. Importantly, we do so from an ex-ante perspective—i.e., before the chances are realized—which has rarely been explored. In an online survey, we asked uninvolved respondents to evaluate ex-ante the fairness of unequal allocations of chances. We varied the source of inequality of chances, using a comprehensive range of factors. Respondents also evaluated how much control individuals hold over the distribution of chances. Results show that the source of inequality has considerable effects on the ex-ante perception of fairness and control. Unequal chances based on socioeconomic and biological factors, such as gender, family income and ethnicity, are evaluated to be both unfair and beyond one’s control. Allocations based on factors that are judged to be under higher individual control, such as effort and knowledge are perceived as fairer. Luck is the exception, ranking as high in fairness as effort and knowledge, but similarly low in individual control as ethnicity, family income, and gender.
On Your Own Side of the Fence
(Working Paper On the Way)
This paper explores the causal mechanism behind the finding that living close to poor individuals of another ethnicity decreases support for income redistribution. We employ a laboratory experiment to extract causal relationships in a controlled environment. Highly-paid participants (“the rich”) are randomly assigned to interact with poorly-paid participants (“the poor”) of different ethnicities or with other highly-paid participants. They then propose redistribution schemes affecting a large group of rich and poor. In contrast to the exiting literature, the results show that proximity with the poor increases redistribution---regardless of the poor's ethnicity. Moreover, we report that, if interactions are not exogenously enforced, Caucasians avoid interactions with minorities. This suggests that inter-ethnic proximity with the poor does not directly affect preferences for redistribution; rather, it might decrease contact with the poor nearby, which in turn reduces support for redistribution.