The motivational cost of inequality: pay gaps reduce the willingness to pursue rewards

Gesiarz, Filip, De Neve, Jan-Emmanuel C J M and Sharot, Tali (2019) The motivational cost of inequality: pay gaps reduce the willingness to pursue rewards. CEP Discussion Papers (CEPDP1664). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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Abstract

Factors beyond a person's control, such as demographic characteristics at birth, often influence the availability of rewards an individual can expect for their efforts. We know surprisingly little how such pay-gaps due to random differences in opportunities impact human motivation. To test this we designed a study in which we arbitrarly varied the reward offered to each participant in a group for performing the same task. Participants then had to decide whether or not they were willing to exert effort to receive their reward. Unfairness reduced participants' motivation to pursue rewards even when their relative position in the distribution was high, despite the decision being of no benefit to others and reducing reward for oneself. This relationship was partially mediated by participants' feelings. In particular, large disparity was associated with greater unhappiness, which was associated with lower willingness to work - even when controlling for absolute reward and its relative value, both of which also affected decisions to pursue rewards. Our findings suggest pay-gaps can trigger psychological dynamics that hurt productivity and well-being of all involved.

Item Type:	Monograph (Discussion Paper)
Official URL:	https://cep.lse.ac.uk/_new/publications/discussion...
Additional Information:	© 2019 The Author(s)
Divisions:	Centre for Economic Performance
Subjects:	H Social Sciences > HC Economic History and Conditions H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
JEL classification:	D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions D - Microeconomics > D9 - Intertemporal Choice and Growth > D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving J - Labor and Demographic Economics > J2 - Time Allocation, Work Behavior, and Employment Determination and Creation; Human Capital; Retirement > J22 - Time Allocation and Labor Supply
Date Deposited:	17 Feb 2020 12:54
Last Modified:	11 Dec 2024 19:33
URI:	http://eprints.lse.ac.uk/id/eprint/103451

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