Corporate Social Responsibility as a Signal in the Labor Market

Eldar Dadon, Marie Claire Villeval () and Ro'i Zultan
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Eldar Dadon: BGU - Ben-Gurion University of the Negev
Marie Claire Villeval: GATE Lyon Saint-Étienne - Groupe d'Analyse et de Théorie Economique Lyon - Saint-Etienne - UL2 - Université Lumière - Lyon 2 - UJM - Université Jean Monnet - Saint-Étienne - EM - EMLyon Business School - CNRS - Centre National de la Recherche Scientifique

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Abstract: Working for a firm engaged in Corporate Social Responsibility (CSR) appeals to potential workers by boosting their self-image and sense of purpose. We propose an additional mechanism: CSR signals a firm's future treatment of workers. Our model links CSR engagement with a firm's propensity to support workers during unforeseen times of need. Under this assumption, a potential future need of the worker leads to more firms engaging in CSR and to a higher workers' willingness to accept lower wages. Our experiment manipulates potential future needs. While the aggregate analysis does not support our theory, exploratory analysis reveals that male workers respond as predicted, whereas female workers do not. Consistently, in a risky environment, male employers increase their CSR engagement, which raises the acceptance rate among male workers. These results are not observed among female employers and workers.

Keywords: Corporate Social Responsability; Signaling; Labor market; Experiment (search for similar items in EconPapers)
Date: 2024-10-08
Note: View the original document on HAL open archive server: https://hal.science/hal-04726664v2
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