Working for a Cause, for a Party, or for the Government: An experimental investigation of the labor supply responses to charitable giving, political donations, and taxation

Study 1 (originally pre-registration): This experimental investigation aims to compare the labor supply responses to taxation to the labor supply responses to other forms of redistribution. In the context of a real-effort task, participants' payments will be subjected to a 25% withholding, the beneficiary of which varies across five treatment groups. There will be 2 control groups, one where the piece-rate is the same as the pre-withholding piece-rate in the treatments and one where the piece-rate is the same as the post-withholding piece-rate in the treatments.

Study 2 (update to pre-registration on 28 October 2023):
In study 1, we found negative labor supply responses among all treatment groups, compared to the control group with the same net wage. In study 2, we will further explore the labor supply responses to working for others by exploring the impact of perceived autonomy on labor supply. Study 2 is very similar to study 1, however, we remove the control (high) group, the ACLU group, and the Heritage Foundation group from study 1. We then add 2 new treatments. We call these treatments "restricted choice" and "unrestricted choice." In "restricted choice," participants are informed about the task and are asked which political party they would like to earn points for (in addition to earning points for themselves.) In "unrestricted choice," participants are given these same choices, but are also given the option to only earn points for themselves, without earning points for a political party. The only other change in the procedures is the addition of a comment section at the end of the survey and the removal of information that relates to the treatments we removed.

Study 3 (update to pre-registration on 15 May 2024):
In study 2, we found that adding "autonomy" (in the form of a choice about which organization to work for) only mitigated the negative labor supply response to working for others when participants were offered the choice to work only for themselves (net wage to participants remained constant, regardless of their choice). We again found negative labor supply responses to working for both the Republican and Democrat parties (when no choice is involved), and this negative effect persists after controlling for political affiliation. In Study 3, we want to further explore the relationship between opinions about the organizations, choice about which organization to work for, and labor supply. Specifically, we will run a preliminary study where participants will give us their opinions of a list of about 12 charities. Then, we will select the top 5 most trusted charities from this study, and will use these as the potential organizations in the main study. In the main study (for study 3), we will have 4 treatments: control (low), rank_nochoice (where participants will be given information about the 5 potential charities and asked to rank them in terms of how much they trust the charities, then we will assign participants to work for their most trusted charity), rank_thenchoice (where participants will be given information about the 5 potential charities and asked to rank them in terms of how much they trust the charities; following this, participants will choose which specific charity they would like to earn money for, but will be required to work for a charity), and rank_thenchoice_unrestricted (same as rank_thenchoice, but participants will be given the choice to work only for themselves rather than also working for a charity).

Interventions (study 1):

Treatment groups will have 25% of earnings directed to one of the following:

The U.S. Federal Government
The Republican Party
The Democratic Party
The American Civil Liberties Union
The Heritage Foundation

Control groups:

LOW: No tax/donation, piece-rate same as post-tax/donation piece-rate in treatment groups
HIGH: No tax/donation, piece-rate same as pre-tax/donation piece-rate in treatment groups

Interventions (study 2):

Treatment groups will have 25% of earnings directed to one of the following:
The Republican Party
The Democratic Party
Choice between Republican or Democratic party
Choice between working only for self or working for either the Republican or Democratic party

Control group:
LOW: No tax/donation, piece-rate same as post-tax/donation piece-rate in treatment groups

Interventions (study 3):
Treatment groups will have 25% of earnings directed to one of the following:
The participant's most trusted charity (based on rankings at the individual level)
Choice of one of the list of potential charities
Choice between working only for self or working for one of the list of potential charities

Control group:
LOW: No tax/donation, piece-rate same as post-tax/donation piece-rate in treatment groups

2023-08-01

2024-06-01

Chosen working time, total number of tasks completed, task efficiency (tasks completed per minute of working time)

Study 1: Participants will join the experiment, give consent, and answer 2 questions about their political opinions. Then, all participants will be randomized into one of 7 groups, given information about which organization any withheld earnings will go to, and told about the real-effort task. Participants will choose how long they want to work (0-180 seconds, in intervals of 30 seconds) and will complete as many real-effort tasks as they want to/can within this time limit. Following the completion of the tasks, all participants will be given information about all of the organizations and asked to give their opinion of the extent to which these organizations can be trusted to generally do what is right with the money they receive. Finally, participants will complete a short demographic survey.

Study 2: Participants will join the experiment, give consent, and answer 2 questions about their political opinions. Then, all participants will be randomized into one of 5 groups, given information about which organization any withheld earnings will go to, and told about the real-effort task. Participants will choose how long they want to work (0-180 seconds, in intervals of 30 seconds) and will complete as many real-effort tasks as they want to/can within this time limit. Following the completion of the tasks, all participants will be given information about all of the organizations and asked to give their opinion of the extent to which these organizations can be trusted to generally do what is right with the money they receive. Finally, participants will complete a short demographic survey and will be asked if they have any comments about the experiment.

Study 3: Participants will join the experiment, give consent, and answer 2 questions about their political opinions. Then, all participants will be randomized into one of 4 groups, given information about the list of potential charities, asked to rank the charities (from least trusted to most trusted), and told about the real-effort task (in treatments involving choice, participants will make the choice about which charity to work for on the same page as the instruction page for the real effort task). Participants will choose how long they want to work (0-180 seconds, in intervals of 30 seconds) and will complete as many real-effort tasks as they want to/can within this time limit. Finally, participants will complete a short demographic survey and will be asked if they have any comments about the experiment.


Study 1: Treatment groups will have 25% of earnings directed to one of the following:

The U.S. Federal Government
The Republican Party
The Democratic Party
The American Civil Liberties Union
The Heritage Foundation

Control groups:

LOW: No tax/donation, piece-rate same as post-tax/donation piece-rate in treatment groups
HIGH: No tax/donation, piece-rate same as pre-tax/donation piece-rate in treatment groups

Study 2: Treatment groups will have 25% of earnings directed to one of the following:
The Republican Party
The Democratic Party
Choice between Republican or Democratic party
Choice between working only for self or working for either the Republican or Democratic party

Control group:
LOW: No tax/donation, piece-rate same as post-tax/donation piece-rate in treatment groups

Study 3: Treatment groups will have 25% of earnings directed to one of the following:
The participant's most trusted charity (based on rankings at the individual level)
Choice of one of the list of potential charities
Choice between working only for self or working for one of the list of potential charities

Control group:
LOW: No tax/donation, piece-rate same as post-tax/donation piece-rate in treatment groups

Online experiment, randomization conducted through built-in software on Qualtrics. Due to the political nature of the questions we ask in this experiment, we will set up a recruiting strategy to ensure that our sample is balanced by political orientation.

Individual

No

Study 1: Pending power analysis, as described below. There will be no clustering, so the number of observations will be the number of clusters.

Study 2: There will be no clustering, so the number of observations will be the number of clusters.

Study 3: There will be no clustering, so the number of observations will be the number of clusters.

Study 1: Pending power analysis, as described below. Likely around 700 observations (100 per treatment/control group). Study 2: 500 observations (100 per treatment/control group) Study 3: 400 observations (100 per treatment/control group) Study 3 Preliminary: 100 observations

Study 1: Pending power analysis, as described below. Our initial estimate is that there will be around 100 participants in each treatment/control group. There are 5 treatment groups and 2 control groups, so the total number of participants will be around 700, pending power calculations, as explained in detail below.

Study 2: 100 observations per treatment/control group (500 total observations)

Study 3: 400 observations (100 per treatment/control group)
Study 3 Preliminary: 100 observations

Study 1: To calculate our final sample size, we will do the following. 1. Recruit 100 participants through Prolific. These participants will all be assigned to the control (low) group as described above. These participants will complete the experiment. Their data will be used to conduct power analysis and, eventually, in our tests for treatment effects. 2. Calculate the mean and standard deviation of each of the outcome variables (chosen working time and total tasks completed). 3. Use these means and standard deviations to calculate the minimum detectable effect (MDE) for each outcome variable based on a sample with 100 participants in each of the 7 treatment groups. We will use alpha=0.05 and a power level of 0.8 to conduct this analysis. If the MDE is less than 0.2 standard deviations for each of the outcome variables (based on the definition of a “small” effect as detailed in Cohen (1988)), we will use this sample size and conduct the full experiment with 100 participants in each of the treatment/control groups. 4. If the MDE is greater than 0.2 standard deviations for at least one of the outcome variables using the 100 participants per treatment/control group sample size, we will calculate the sample size per group necessary to achieve a MDE of 0.2 standard deviations for each of the outcome variables. The larger of the two sample sizes (we will have one sample size for each outcome variable) will be our sample size per treatment/control group in the full experiment. 5. If the sample size in (4) is too large to be financially feasible, we will instead calculate the maximum possible sample size given our financial resources (this sample size will be less than the sample size found in (4)), ensure that the MDE with this sample size is reasonably small, and then conduct the full experiment using this smaller but financially feasible sample size. UPDATE: At 100 participants per group, we get a minimum detectable effect of 0.4 standard deviations. To get a minimum detectable effect of 0.2 standard deviations, we would need 394 participants per group. The cost of getting this many participants is more than the resources we have available. At 200 participants per group, we get a MDE of 0.28 standard deviations. However, we currently have finances to cover 100 participants per group and have run study 1 with this many participants.