ICES Experimental Economics Brown Bag Lecture
Working for Others - or Not: An Investigation of Labor Supply Responses to Redistribution
Thursday, September 19, 2024 12:00 PM to 1:00 PM EDT
Vernon Smith Hall (formerly Metropolitan Building), Room 5075
The Interdisciplinary Center for Economic Science (ICES) presents an ICES Brown Bag Lecture featuring:
George Mason University
Working for Others - or Not: An Investigation of Labor Supply Responses to Redistribution
Abstract
In this paper, we examine how effort provision changes when work also benefits others through various forms of redistribution. Across three online experiments with 1,600 participants, we find that people work less when earnings are taxed or redirected to support various organizations, revealing a broad aversion to working for others. Even when participants hold favorable opinions of the beneficiaries, the negative response persists, albeit to a lesser extent. Granting participants the option to choose the beneficiary does little to reduce this aversion. However, when individuals are given the freedom to choose whether to work solely for themselves or also for a chosen beneficiary, the negative response is mitigated. These results highlight the role social motivations and perceived autonomy play in labor decisions, suggesting that the psychological costs of redistribution may diminish the social benefits when choice and control are limited. By examining the interplay between redistribution, autonomy, and social motivations, this research offers new insights into the design of systems of taxation and provision of public goods. Our findings suggest that decreasing the salience of taxes and increasing taxpayer autonomy may be effective ways to mitigate detrimental effects of taxation on the willingness to work.
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