Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/232819
Authors: 
Briscese, Guglielmo
Feltovich, Nick
Slonim, Robert
Year of Publication: 
2021
Series/Report no.: 
IZA Discussion Papers No. 14067
Abstract: 
Firms can donate a share of profits to charity as a form of corporate social responsibility (CSR). Recent experiments have found that such initiatives can induce higher effort by workers, generating benefits for both sides of the labour market. We design a novel version of the gift-exchange game to account for self-selection, and find that wages remain the most effective incentive to attract and motivate workers, with corporate donations playing a smaller role than previously suggested. We also show that firms substitute donations to charity with lower wage offers, keeping their profits constant but reducing workers' earnings. Initiatives of corporate philanthropy can thus be marginally beneficial for firms, but considerably costly for workers.
Subjects: 
gift exchange
reciprocity
corporate philanthropy
self-selection
JEL: 
D64
C91
M52
Document Type: 
Working Paper

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