Relative pay and labor supply

Anat Bracha*, Uri Gneezy, George Loewenstein

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

35 Scopus citations


We examine the impact of relative wages on labor supply in a laboratory experiment. We test the hypothesis that, ceteris paribus, making a given wage high (low) relative to other wage levels will lead to an increase (decrease) in labor supply. We find that labor supply does respond significantly to relative pay, and in the expected direction. However, when a strong enough reason for the relative low pay is given, this difference disappears.

Original languageAmerican English
Pages (from-to)297-315
Number of pages19
JournalJournal of Labor Economics
Issue number2
StatePublished - 1 Apr 2015
Externally publishedYes

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