Back to History Current Version
Relative Pay Comparisons in the Workplace: Field Evidence on Eff ort and Labor Supply
Last registered on February 13, 2015

Pre-Trial

Trial Information
General Information
Title
Relative Pay Comparisons in the Workplace: Field Evidence on Eff ort and Labor Supply
RCT ID
AEARCTR-0000569
Initial registration date
February 13, 2015
Last updated
February 13, 2015 10:04 PM EST
Location(s)
Region
Primary Investigator
Affiliation
University of Pittsburgh
Other Primary Investigator(s)
PI Affiliation
Columbia University
PI Affiliation
Columbia University
Additional Trial Information
Status
On going
Start date
2014-09-01
End date
2015-12-31
Secondary IDs
Abstract
A long tradition in economics and psychology has advanced the notion that individuals care about not only their own pay, but also their pay relative to that of their co-workers. We use a field experiment with Indian manufacturing workers to test whether relative pay comparisons affect effort and labor supply. Workers perform individual production tasks, but are organized into distinct teams - defined by the type of product they produce. We randomize teams to receive either compressed wages (where all workers earn the same random daily wage) or heterogeneous wages (where each team member is paid a different wage according to his baseline productivity level). This enables effort comparisons across workers who receive the same absolute wage, but vary in the wages of their co-workers. In addition, we introduce heterogeneity in the extent to which pay differences across co-workers seem justified.
External Link(s)
Registration Citation
Citation
Breza, Emily, Supreet Kaur and Yogita Shamdasani. 2015. "Relative Pay Comparisons in the Workplace: Field Evidence on Eff ort and Labor Supply." AEA RCT Registry. February 13. https://doi.org/10.1257/rct.569-1.0.
Former Citation
Breza, Emily et al. 2015. "Relative Pay Comparisons in the Workplace: Field Evidence on Eff ort and Labor Supply." AEA RCT Registry. February 13. http://www.socialscienceregistry.org/trials/569/history/3596.
Experimental Details
Interventions
Intervention(s)
We recruit workers from nearby villages to participate full-time in a low-skilled manufacturing job. At our worksites, workers are organized into teams of three and trained in one of ten tasks, for which production is an individual activity. They first undergo a training period, during which they are paid the same daily wage. Once the training period is over, we vary the wages paid across teams, and in some cases, across workers within a team.
Intervention Start Date
2014-09-01
Intervention End Date
2015-12-31
Primary Outcomes
Primary Outcomes (end points)
(1) Daily production for each worker, measured by a count of the total items produced in a day

(2) Daily attendance of each worker, including time of arrival and departure from worksite

(3) Total labor earnings of each worker

(4) Team-level output
Primary Outcomes (explanation)
Total labor earnings of each worker will be constructed from data from worksite payroll as well as end line survey responses about outside activities on days when workers were absent.
Secondary Outcomes
Secondary Outcomes (end points)
Secondary Outcomes (explanation)
Experimental Design
Experimental Design
Once the training period is over, workers' baseline productivity is assessed, and each worker is assigned a relative productivity rank within their team. We then randomize teams into one of four wage treatments:

(1) Each team member is paid according to his baseline productivity, with the wages for the lowest, middle and highest productivity workers being w_L, w_M and w_H respectively, where w_training < w_L < w_M < w_H

(2) All team members are paid the same daily wage of w_L

(3) All team members are paid the same daily wage of w_M

(4) All team members are paid the same daily wage of w_H
Experimental Design Details
Not available
Randomization Method
Randomization of workers into teams and of teams into treatment is done on a computer.
Randomization Unit
Workers are randomized into jobs at the individual level. Once at the worksite, they are randomized into teams. Randomization of teams into wage treatments is done at the team level.
Was the treatment clustered?
No
Experiment Characteristics
Sample size: planned number of clusters
N/A
Sample size: planned number of observations
1200 subjects
Sample size (or number of clusters) by treatment arms
100 teams heterogeneous wage treatment, 300 teams homogenous wage treatment
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB
INSTITUTIONAL REVIEW BOARDS (IRBs)
IRB Name
Columbia University (Morningside) Institutional Review Board
IRB Approval Date
2013-10-09
IRB Approval Number
IRB-AAAM690