Natural groups and economic characteristics as driving forces of wage discrimination

Chmura, T. ORCID: 0000-0001-7476-2030, Goerg, S.J. and Weiss, P., 2016. Natural groups and economic characteristics as driving forces of wage discrimination. European Economic Review, 90, pp. 178-200. ISSN 0014-2921

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We investigate whether the origin of an employee provides different motives for wage discrimination in gift-exchange experiments with students and migrant workers in China. In a lab and an internet experiment, subjects in the role of employers can condition their wages on the employees' home provinces. The resulting systematic differences in wages can be linked to natural groups and economic characteristics of the provinces. In-group favoritism increases wages for employees who share the same origin as the employer, while an increased probability of being matched with an employee with a different ethnicity reduces wages. Furthermore, wages in the laboratory increase with the actual wage level in the employees׳ home province. Nevertheless, employees' effort is not influenced by these variables; only the wage paid in the experiment influences effort.

Item Type: Journal article
Publication Title: European Economic Review
Creators: Chmura, T., Goerg, S.J. and Weiss, P.
Publisher: Elsevier
Date: November 2016
Volume: 90
ISSN: 0014-2921
Rights: © 2016 Elsevier B.V. All rights reserved.
Divisions: Schools > Nottingham Business School
Record created by: Linda Sullivan
Date Added: 24 Apr 2018 09:58
Last Modified: 27 Apr 2018 03:00

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