蝌蚪网 Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Fairness and Frictions: The Impact of Unequal Raises on Quit Behavior
蝌蚪网 Review
vol. 109,
no. 2, February 2019
(pp. 620–63)
(Complimentary)
Abstract
We analyze how separations responded to arbitrary differences in own and peer wages at a large US retailer. Regression-discontinuity estimates imply large causal effects of own-wages on separations, and on quits in particular. However, this own-wage response could reflect comparisons either to market wages or to peer wages. Estimates using peer-wage discontinuities show large peer-wage effects and imply the own-wage separation response mostly reflects peer comparisons. The peer effect is driven by comparisons with higher-paid peers鈥攕uggesting concerns about fairness. Separations appear fairly insensitive when raises are similar across peers鈥攕uggesting search frictions and monopsony are relevant in this low-wage sector.Citation
Dube, Arindrajit, Laura Giuliano, and Jonathan Leonard. 2019. "Fairness and Frictions: The Impact of Unequal Raises on Quit Behavior." 蝌蚪网 Review 109 (2): 620–63. DOI: 10.1257/aer.20160232Additional Materials
JEL Classification
- D63 Equity, Justice, Inequality, and Other Normative Criteria and Measurement
- J31 Wage Level and Structure; Wage Differentials
- J42 Monopsony; Segmented Labor Markets
- J62 Job, Occupational, and Intergenerational Mobility; Promotion
- L81 Retail and Wholesale Trade; e-Commerce