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Natural groups and economic characteristics as driving forces of wage discrimination

Chmura, Thorsten; Goerg, Sebastian J.; Weiss, Pia

Authors

Thorsten Chmura thorsten.chmura@nottingham.ac.uk

Sebastian J. Goerg

PIA WEISS PIA.WEISS@NOTTINGHAM.AC.UK
Assistant Professor



Abstract

© 2016 Elsevier B.V. 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.

Citation

Chmura, T., Goerg, S. J., & Weiss, P. (2016). Natural groups and economic characteristics as driving forces of wage discrimination. European Economic Review, 90, 178-200. https://doi.org/10.1016/j.euroecorev.2016.04.005

Journal Article Type Article
Acceptance Date Apr 6, 2016
Online Publication Date Apr 27, 2016
Publication Date Nov 1, 2016
Deposit Date Sep 19, 2016
Publicly Available Date Apr 28, 2018
Journal European Economic Review
Print ISSN 0014-2921
Electronic ISSN 1873-572X
Publisher Elsevier
Peer Reviewed Peer Reviewed
Volume 90
Pages 178-200
DOI https://doi.org/10.1016/j.euroecorev.2016.04.005
Keywords Wages; Discrimination; Social identity; Natural groups; Lab experiment; Gift-exchange; Migrant-workers; China
Public URL http://eprints.nottingham.ac.uk/id/eprint/36959
Publisher URL http://www.sciencedirect.com/science/article/pii/S0014292116300708
Copyright Statement Copyright information regarding this work can be found at the following address: http://creativecommons.org/licenses/by-nc-nd/4.0
Additional Information This article is maintained by: Elsevier; Article Title: Natural groups and economic characteristics as driving forces of wage discrimination; Journal Title: European Economic Review; CrossRef DOI link to publisher maintained version: https://doi.org/10.1016/j.euroecorev.2016.04.005; Content Type: article; Copyright: © 2016 Elsevier B.V. All rights reserved.

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Copyright Statement
Copyright information regarding this work can be found at the following address: http://creativecommons.org/licenses/by-nc-nd/4.0





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