Unequal pay, fairness perceptions, and work effort: Experimental evidence from China

Valeria Galchenko, Nick Zubanov, Ho Lun Wong and Xiang Zhou

Working Papers from University of Konstanz, Cluster of Excellence "The Politics of Inequality. Perceptions, Participation and Policies"

Abstract: In a field experiment in China, we informed randomly selected workers that others received a higher wage for the same work. Compared to the uninformed but equally paid workers, the informed perceived their pay as less fair, but, surprisingly, increased their output without reducing quality. Although we did not communicate reasons for the pay difference, a post-experiment survey revealed that workers developed their own, predominantly benign, explanations, the leading one being higher quality of the better-paid workers. We validated our experimental results with a follow-up survey of 1100 people of working age in China whom we briefed about our findings and asked for their explanations. 57% believed that the informed workers perceived their higher-paid peers to be better workers and aspired to match them. When asked what they would do in a similar situation, 75% replied that they would work harder as well. Our results hint at the importance of culture in moderating behavioral responses to unequal pay, not all of them necessarily negative.

Date: 2025
New Economics Papers: this item is included in nep-cna and nep-exp
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cexwps:316449

DOI: 10.48787/kops/352-2-d14zcho86rkw3

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