Fairness and Frictions: The Impact of Unequal Raises on Quit Behavior
By Arindrajit Dubé, Laura Giuliano, Jonathan S. Leonard. The American Economic Review, 2018
208 citations recorded by the source corpus.
We analyze how separations responded to arbitrary differences in own and peer wages at a large US retailer. Regression-discontinuity estimates imply large causal effects of own-wages on separations, and on quits in particular. However, this own-wage response could reflect comparisons either to market wages or to peer wages. Estimates using peer-wage discontinuities show large peer-wage effects and imply the own-wage separation response mostly reflects peer comparisons. The peer effect is driven by comparisons with higher-paid peers—suggesting concerns about fairness. Separations appear fairly insensitive when raises are similar across peers—suggesting search frictions and monopsony are relevant in this low-wage sector. (JEL D63, J31, J42, J62, L81)
Subfields: Economics and Econometrics, Safety Research
View Paper: https://www.semanticscholar.org/paper/6dbcac1ee09f1d944d312738cf607cd2fd172bd5
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
In Economics and Econometrics
- Alan Manning
- Ellora Derenoncourt
- Claire Montialoux
- M. Alan
- David H. Autor
- J. V. van Ommeren
- Giuseppe Ragusa
- F. Mazzolari
In Safety Research
Citations in the corpus
- Monopsony in Labor Markets: A Review (2020, background): “Dube, Giuliano, and Leonard (2019) considered how quits respond to changes in the minimum wage where this has higher bite in some areas than others.”
- Monopsony in Labor Markets: A Meta-Analysis (2020, unknown): “…however, unclear whether firms can exercise all of their monopsony power, as factors such as minimum wages, union contracts, social norms, worker responses to perceptions of fairness (see Dube, Giuliano, and Leonard 2019), or optimization costs (Dube et al. 2018; Manning 2020) may also affect wage.”
- Minimum Wages and Racial Inequality* (2020, background): “See Dube (2019a) for an international review of the evidence, which also finds low employment responses to minimum wage increases across a variety of contexts.”