Do Workers Discriminate against Their Out-Group Employers? Evidence from the Gig Economy

Abstract

We study possible worker-to-employer discrimination manifested via social preferences in an online labor market. Specifically, we ask, do workers exhibit positive social preferences for an out-race employer relative to an otherwise-identical, own-race one? We run a well-powered, model-based experiment wherein we recruit 6,000 workers from Amazon's M-Turk platform for a real-effort task and randomly (and unobtrusively) reveal to them the racial identity of their non-fictitious employer. Strikingly, we find strong evidence of race-based altruism-white workers, even when they do not benefit personally, work relatively harder to generate more income for black employers. Self-declared white Republicans and Independents exhibit significantly more altruism relative to Democrats. Notably, the altruism does not seem to be driven by race-specific beliefs about the income status of the employers. Our results suggest the possibility that pro-social behavior of whites toward blacks, atypical in traditional labor markets, may emerge in the gig economy where associative (dis)taste is naturally muted due to limited social contact.

Experimental Research on Labor Market Discrimination

“…informative about discrimination prior to the advent of sex-blind selection. 30 By way of analogy, suppose that, as in a traditional nonexperimental study of wage discrimination, we had data on workers' wages, race, sex, and human capital controls. However, suppose we also had repeated observations on the race of the supervisor who was setting wages, and this varied for reasons exogenous with respect to pay.…”

Three essays in behavioral economics

“…It is highlighted that the worker-to-employer discrimination might be most relevant in settings where there is considerable degree of contact between the employer and the worker for social preferences to get activated. For example, Asad et al (2020) finds that workers provide more effort for outgroup employers in an online environment where the social contact with the employer is minimal.…”

“…Fortunately, there is a growing literature in economics which is directly testing for the evidence of employeeto-employer discrimination (see, for example, ; Asad, Banerjee, and Bhattacharya (2020); ; ; ). This literature generally finds that workers care about the identity of the employer and adjust their behavior accordingly.…”