Corporate Social Responsibility and Justice in the Salary Structure: Practice or Symbolism?

Abstract

Socially responsible companies should provide fair wages and maintain reasonable internal wage gaps as part of a commitment to workers as primary stakeholders of the organization. Our research seeks to clarify the influence of the Corporate Social Responsibility (CSR) system on the salary level of unskilled workers and the magnitude of internal salary gaps between the highest and lowest levels of the organization. We used a sample of 815 companies that are representative of the Chilean business ecosystem and developed a linear regression model with endogenous treatment. Our results show that the declaration of a CSR program positively influences the wage level of unskilled workers but increases the magnitude of internal organizational wage gaps. These findings suggest a partial adherence of companies declaring CSR in terms of commitment to their employees.