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Field
Abstract
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Before
The Equal Pay Law mandates that firms pay the same wage to workers employed in the same occupation. In this experiment, we aim to investigate the impact of an Equal Pay Policy on hiring discrimination at varying levels of competition in the labour market. We've designed a laboratory experiment where we'll use the concept of a reservation wage to emulate the Hotelling model (Hotelling, 1929), thereby introducing competition into the hiring market. The experiment is designed to answer three questions: 1) How does an equal pay policy influence employers' wage decisions for different groups? 2) How does an equal pay policy affect employers' hiring decisions for different groups? 3) Does competition in the labour market influence the impact of the equal pay policy?
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After
The Equal Pay Law mandates that firms pay the same wage to workers employed in the same occupation. In this experiment, we aim to investigate the impact of an Equal Pay Policy on hiring discrimination at varying levels of competition in the labour market. We've designed a online experiment where we'll use the concept of a reservation wage to emulate the Hotelling model (Hotelling, 1929), thereby introducing competition into the hiring market. The experiment is designed to answer three questions: 1) How does an equal pay policy influence employers' wage decisions for different groups? 2) How does an equal pay policy affect employers' hiring decisions for different groups? 3) Does competition in the labour market influence the impact of the equal pay policy?
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Field
Experimental Design (Public)
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Before
This experiment consists of two phases: 1) the preliminary phase, in which we aim to recruit 150 participants to complete a series of anagram tasks; and 2) the main phase, in which we aim to recruit 200 participants for each of the four treatments to complete a hiring task (i.e., 800 participants in total).
In the preliminary phase, participants will be asked to complete five 2-minute anagram tasks individually and paid by piece-rate performance. This phase is designed to generate actual profiles of candidates to be used in the main phase of the experiment. The benefit of using actual profiles is to introduce real consequences for discriminatory behaviour and therefore capture the actual level of employer discrimination (Hedegaard & Tyran, 2018). To construct a balanced candidates pool for the second phase, 75 participants will be recruited from an ethnic minority group (i.e., East Asians) and the remaining 75 will be recruited from the ethnic majority group (i.e., Whites). Out of the five performances, we drop the lowest and the highest scores to form the final candidate profiles. And we randomly choose 2 scores from the rest of 3 scores remaining as the pre-performance score and interview performance score
In the main phase of the experiment, participants will undertake a manager's role to make hiring decisions, using a set of four pre-screened candidate profiles based on data from the preliminary phase. Each participant will be assigned to one of the following four experimental treatments: Individual-Flexible treatment - without the equal pay policy or hiring competition (Treatment 1), Individual-Fixed treatment - with an equal pay policy (requiring employers to offer the same wage to all chosen candidates) but without hiring competition (Treatment 2), Competition-Flexible treatment - with hiring competition (employers compete with each other over wages for each candidate) but without the equal pay policy (Treatment 3), and Competition-Fixed treatment - with both the equal pay policy and hiring competition (Treatment 4). We will recruit only participants from the ethnic majority group to act as employers/managers. Each set of four candidate profiles includes two minority and two majority candidates, randomly selected from the pool collected in the preliminary phase.
The employer/manager will be provided with the interview performances of all four candidates. They will then decide whether or not to hire each candidate and, if they opt to hire, what wage they are willing to offer. Each candidate will have an undisclosed reservation wage. The employer/manager can successfully hire a candidate if their wage offer is higher than the candidate's reservation wage (Treatments 1 and 2), or if their wage offer is higher than both the candidate's reservation wage and the competing manager's wage offer for the same candidate (Treatments 3 and 4). Depending on the treatment, the potential employer/manager can choose to offer an identical wage (Treatments 2 and 4) or different wages to different candidates. Along with interview performances, the potential employer/manager will also be given information about the candidates’ ages, prolific IDs (not their actual IDs), and ethnicity (reflected through their surnames).
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After
This experiment consists of two phases: 1) the preliminary phase, in which we aim to recruit 150 participants to complete a series of anagram tasks; and 2) the main phase, in which we aim to recruit 44 participants for each of the four treatments to complete a hiring task (i.e., 176 participants in total).
In the preliminary phase, participants will be asked to complete five 2-minute anagram tasks individually and paid by piece-rate performance. This phase is designed to generate actual profiles of candidates to be used in the main phase of the experiment. The benefit of using actual profiles is to introduce real consequences for discriminatory behaviour and therefore capture the actual level of employer discrimination (Hedegaard & Tyran, 2018). To construct a balanced candidates pool for the second phase, 75 participants will be recruited from an ethnic minority group (i.e., East Asians) and the remaining 75 will be recruited from the ethnic majority group (i.e., Whites). Out of the five performances, we drop the lowest and the highest scores to form the final candidate profiles. And we randomly choose 2 scores from the rest of 3 scores remaining as the pre-performance score and interview performance score
In the main phase of the experiment, participants will undertake a manager's role to make hiring decisions, using a set of four pre-screened candidate profiles based on data from the preliminary phase. Each participant will be assigned to one of the following four experimental treatments: Individual-Flexible treatment - without the equal pay policy or hiring competition (Treatment 1), Individual-Fixed treatment - with an equal pay policy (requiring employers to offer the same wage to all chosen candidates) but without hiring competition (Treatment 2), Competition-Flexible treatment - with hiring competition (employers compete with each other over wages for each candidate) but without the equal pay policy (Treatment 3), and Competition-Fixed treatment - with both the equal pay policy and hiring competition (Treatment 4). We will recruit only participants from the ethnic majority group to act as employers/managers. Each set of four candidate profiles includes two minority and two majority candidates, randomly selected from the pool collected in the preliminary phase.
The employer/manager will be provided with the interview performances of all four candidates. They will then decide whether or not to hire each candidate and, if they opt to hire, what wage they are willing to offer. Each candidate will have an undisclosed reservation wage. The employer/manager can successfully hire a candidate if their wage offer is higher than the candidate's reservation wage (Treatments 1 and 2), or if their wage offer is higher than both the candidate's reservation wage and the competing manager's wage offer for the same candidate (Treatments 3 and 4). Depending on the treatment, the potential employer/manager can choose to offer an identical wage (Treatments 2 and 4) or different wages to different candidates. Along with interview performances, the potential employer/manager will also be given information about the candidates’ ages, prolific IDs (not their actual IDs), and ethnicity (reflected through their surnames).
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Field
Planned Number of Observations
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Before
Each treatment has 400 candidate pools. Each pool has 2 managers and 4 workers. So the total will be 800 managers and 1600 workers.
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After
Each session has 16 candidates and 1 participant (manager). The total observations are 4x44x1= 176 participants, and 4x44x16 = 2816 candidates. Each participant finish 4 tasks (named as candidate pool), so total will be 704 pools.
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