Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/171175
Authors: 
Bracha, Anat
Year of Publication: 
2017
Citation: 
[Journal:] IZA World of Labor [ISSN:] 2054-9571 [Year:] 2017 [Issue:] 367
Abstract: 
Recent studies show that even irrelevant relative pay information—earnings compared to the past or to others—significantly affects workers’ willingness to work (labor supply) and effort. This effect stems mainly from those whose pay compares unfavorably; accordingly, earning less compared to others or less than in the past significantly reduces one’s willingness to work and effort exerted on the job. Comparing favorably, however, has mixed effects—with usually no effect on effort, but positive or no effects on labor supply. Understanding when relative pay increases labor supply and effort can thus help firms devise optimal payment structures.
Subjects: 
relative pay
effort
labor supply
lab experiments
field experiments
JEL: 
J30
Persistent Identifier of the first edition: 
Document Type: 
Article

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