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Wages and Reciprocity in the Workplace

  • Abigail Barr
  • Pieter Serneels

We explore the role of reciprocity in wage determination by combining experimental and survey data. The experiment is similar to Berg, Dickhaut and McCabe`s (1995) and is conducted with Ghanaian manufacturing workers. The survey relates to the same sample workers and the firms within which they are employed. We find a strong positive association between individual reciprocity and individual wages. However, the direction of causality is unclear. Various aspects of the distribution of the tendency to reciprocate within an employee`s workforce are also associated with that employee`s wage and, in this case, there are strong arguments for a causal link is from former to latter. In particular, the mean, median, and minimum levels of reciprocity have a positive effect on wages, while the spread in the distribution (standard deviation) has a strong significant negative effect. This suggests that homogenous behaviour, or convergence to a norm, is rewarded. The results underline the importance of behavioural characteristics and firm culture for the operation of the labour market.

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Paper provided by University of Oxford, Department of Economics in its series Economics Series Working Papers with number WPS/2004-18.

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Date of creation: 01 Jul 2004
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Handle: RePEc:oxf:wpaper:wps/2004-18
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