Abstract
This paper utilizes data from a randomized field experiment to examine workers’ response to wage inequality at the work place. The paper tests for heterogeneity in equity evaluations as the gender identity of the co-worker changes, offering a better understanding for social comparisons at the work place. To test the above hypotheses workers were assigned to teams of two, performed identical individual tasks over two working sessions, and received a performance – independent hourly wage. Results show unilateral wage cuts introduced in the second working session to reduce the quantity of output produced by 19%. This reduction is higher for an in-group gender inequality relative to an out-group inequality and is mainly driven by male workers. Examining the results by gender show male workers to significantly drop their productivity following a unilateral wage cut, regardless of the gender identity of the reference group. This is contrary to women workers whose productivity is reduced by much less when subjected to an out-group gender inequality. The paper finds a weak evidence for the impact of own performance evaluations in driving the above results. The findings present a behavior of submission by women, a fact that potentially hinders the demand for equal pay and perpetuates the gender gap. This finding encourages the need for exogenously imposed policies to enforce equity and restore wage equality.
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Ghida Karbala is a doctorate researcher and a teaching assistant at Göttingen University in Germany. In the past three years of her doctorate studies she has been managed field projects conducted in India and Egypt. Prior to the doctorate studies, Karbala have worked as a researcher for UNHCR in Lebanon and as a consultant for two impact evaluation projects conducted in Abuja, Nigeria. In her work, she has mainly focused on topics related to gender and women empowerment. Kabala's future research interests lie in the realm of topics addressing migration, violence and conflicts.