Social Responsibility Messages and Worker Wage Requirements: Field Experimental Evidence from Online Labor Marketplaces

This paper examines the effects of employer social responsibility on the wages workers demand through randomized field experiments in two online labor marketplaces. Workers were recruited for short-term jobs and I manipulated whether or not they received information about the employer’s social responsibility. I then observed the payment workers were willing to accept for the job. In the first experiment, information about the employer’s social responsibility marginally reduced prospective workers’ wage requirements on average, and had a significant effect on the highest performers, who were willing to give up the wage differential they would otherwise demand. In the second, prospective workers submitted 44% lower wage bids for the same job after learning about the employer’s social responsibility. This paper provides causal empirical evidence of a revealed preference for social responsibility in the workplace, and of a greater preference amongst the highest performers. More broadly, it provides evidence that workers value purpose and meaningfulness at work, and demonstrates that workers are willing to give up pecuniary benefits for non-pecuniary benefits. It furthermore highlights heterogeneity in worker preferences for non-pecuniary benefits by worker performance type. ___________________________ * Columbia Business School, [email protected]. I thank the Strategy Research Foundation, UCLA Anderson, and Columbia Business School for funding this research. I thank Rajshree Agarwal, Magali Delmas, Witold Henisz, Ian Larkin, Marvin Lieberman, James Ostler, Sara Parker, Leah Platt-Boustan, Suzanne Shu, Jason Snyder, Stephen Spiller, Elizabeth Webb, and two anonymous reviewers for their helpful comments and suggestions. I also thank seminar participants at Columbia Business School, Duke Fuqua Business School, Harvard Business School, INSEAD School of Business, London Business School, NYU Stern Business School, and USC Marshall School of Business, as well as participants in the 2014 Strategy and the Business Environment Conference at Kellogg Business School, the 2014 CCC Doctoral Colloquium at Boston University, the 2014 Alliance for Research on Corporate Sustainability Conference, the 2014 Academy of Management meeting, the 2013 Next Generation Environmental, Social and Governance Workshop at Bentley University, and the 2013 Strategic Management Society meeting for thoughtful comments. Lastly, I am grateful to the founders of the collaborating organization for their cooperation and insights. Any errors are my own.