Sorting and Wage Premiums in Immoral Work

Abstract

We use surveys, laboratory experiments and administrative labor-market data to study how heterogeneity in the perceived immorality of work and in workers' aversion to acting immorally interact to impact labor market outcomes. Specifically, we investigate whether those individuals least concerned with acting morally select into jobs generally perceived as immoral and whether the aversion among many individuals to performing such acts contributes to immorality wage premiums, a form of compensating differential. We show that immoral work is associated with higher wages, both using correlational evidence from administrative labor-market data and causal evidence from a laboratory experiment. We also measure individuals' aversion to performing immoral acts and show that those who find immoral behavior least aversive are more likely to be employed in immoral work in the lab and have a relative preference for work perceived as immoral outside the laboratory. We note that sorting by "immoral" types into jobs that can cause harm may be detrimental for society. Our study highlights the value of employing complementary research methods.

The effect of gender and parenting daughters on judgments of morally controversial companies

“…The major implication from our research is that women are considerably less likely to consider employment in morally controversial companies than men. The reluctance of some people to perform immoral work causes compensation for immoral work to be higher [ 11 ]. The inhibitions of women to work for morally controversial companies would thus be a contributor to a gender gap in wages.…”

“…While investment in equities is consequential, the effects are limited to people who invest a significant portion of their income in stocks. A more consequential decision concerns the prospect of working for a morally controversial company [ 11 ]. Not only are employment considerations relevant to a larger number of individuals, they affect wealth to a much greater extent if working for such a company will be the main source of their income.…”

The effect of gender and parenting daughters on judgments of morally controversial companies

“…The major implication from our research is that women are considerably less likely to consider employment in morally controversial companies than men. The reluctance of some people to perform immoral work causes compensation for immoral work to be higher (Schneider et al, 2020). The inhibitions of woman to work for morally controversial companies would thus be a contributor to a gender gap in wages.…”

“…While investment in equities is consequential, the effects are limited to people who invest a significant portion of their income in stocks. A more consequential decision concerns the prospect of working for a morally controversial company (Schneider et al, 2020). Not only are employment considerations relevant to a larger number of individuals, they affect wealth to a much greater extent if working for such a company will be the main source of their income.…”

Macroeconomic Conditions When Young Shape Job Preferences for Life

“…Workers are not exclusively motivated by money. Many workers also deeply care about the meaning of their job and other non-monetary job attributes (Cassar and Meier, 2018) and are willing to give up income for it (Maestas et al, 2018;Schneider et al, 2020). This is not only of great relevance for mission-oriented organizations, such as not-for-profits and public sector organizations.…”