Arbeitspapier
Worker characteristics and wage differentials: Evidence from a gift-exchange experiment
There is ample empirical evidence indicating that a substantial fraction of the population exhibits social preferences. Recent work also shows that social preferences influence the effectiveness of incentives in labor relations. Hence when making contracting decisions, employers should take into account that workers are heterogenous with respect to both their productivity and their social preferences. This paper presents causal evidence that they do. In a real-effort experiment, we elicit measures of workers' productivity and trustworthiness and make this information available to potential employers. Our data show that employers pay significant wage premia for both traits. Firms make highest profits with trustworthy workers, in particular with highly productive and trustworthy workers. We also document differences in the strength of gift exchange across worker types. In particular, output and profit levels of trustworthy workers are less dispersed than those of not-trustworthy workers.
- Language
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Englisch
- Bibliographic citation
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Series: CESifo Working Paper ; No. 3637
- Classification
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Wirtschaft
Design of Experiments: Laboratory, Individual
Labor Contracts
Economics of Contract: Theory
- Subject
-
information
skills
laboratory experiments
gift exchange games
optimal contracts
- Event
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Geistige Schöpfung
- (who)
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Englmaier, Florian
Strasser, Sebastian
Winter, Joachim
- Event
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Veröffentlichung
- (who)
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Center for Economic Studies and ifo Institute (CESifo)
- (where)
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Munich
- (when)
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2011
- Handle
- Last update
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10.03.2025, 11:44 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Englmaier, Florian
- Strasser, Sebastian
- Winter, Joachim
- Center for Economic Studies and ifo Institute (CESifo)
Time of origin
- 2011