Unfair Chances and Labor Supply

Nickolas Gagnon, Kristof Bosmans () and Arno Riedl ()
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Kristof Bosmans: Maastricht University
Arno Riedl: Maastricht University

No 18096, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We conduct an online experiment to study how the unfairness of chances leading to wage inequality affects labor supply decisions. We find that, at a given wage, disadvantageous wage inequality reduces labor supply, but whether this inequality stems from fair or unfair chances does not matter. That is, a procedure with fair chances does not compensate for wage inequality. Our results stand in stark contrast to prior empirical evidence showing that individuals care about fair chances when making equity judgments.

Keywords: workplace inequality; labor supply; unfair chances (search for similar items in EconPapers)
JEL-codes: D63 D90 J22 J31 M52 (search for similar items in EconPapers)
Date: 2025-08
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-lma
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