Work Meaning and Fair Wages

Abstract

Work meaning is an important driver of labor supply. Since, per definition, work meaning is associated with benefits for others, it also has an important fairness dimension. In a theoretical model, we show that work meaning may increase or decrease workers’ reservation wages, depending on the relative strength of fairness concerns and meaning preferences. To examine the importance of these behavioral motives for labor supply, we conduct a survey experiment with representative samples from the Netherlands and Germany in which we vary within-subject the benefits that a job creates for others. We find that work meaning on average decreases reservation wages, but that only a minority of workers is actually willing to sacrifice wages for work meaning. Fairness concerns are negatively related to willingness to pay for work meaning, while social preferences (like altruism) show a positive association. Workers with a high willingness to pay for work meaning tend to sort into sectors with high perceived societal contributions. Joint paper with Thimo De Schouwer, Elisabeth Gsottbauer, and Heiner Schumacher.