The Economics Area at Schulich School of Business, York University

Invites you to participate in a seminar by and discussion

with

Nickolas Gagnon

Maastricht University

The Netherlands

WEDNESDAY, JANUARY 15, 2020
11:30 am – 1:00 pm
Room W257 Seymour Schulich Building

The Effect of Unfair Chances and Gender Discrimination on Labor Supply

Nickolas Gagnon Kristof Bosmans Arno Riedl∗

 ABSTRACT

Labor market opportunities and pay may be unfair for various reasons, and how workers respond to different types of unfairness can have major consequences. We present the first investigation of the causal impact of unfair chances and of gender discrimination on a primary labor decision for workers: their 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 on an on line platform. 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 suggest a new reason for the lower labor supply of women, which is a prominent explanation for the gender gap in earnings. (JEL: D90, E24, J22, J31, J71, M5)