On the Relevance and Composition of Gifts within the Firm: Evidence from Field Experiments

28 Pages Posted: 30 Aug 2011

See all articles by Charles Bellemare

Charles Bellemare

Université Laval - Département d'Économique; Centre Interuniversitaire sur le Risque, les Politiques Economiques et l'Emploi (CIRPÉE); IZA Institute of Labor Economics

Bruce Shearer

Université Laval - Département d'Économique; IZA Institute of Labor Economics

Multiple version iconThere are 3 versions of this paper

Date Written: August 2011

Abstract

We investigate the economic relevance and the composition of gifts within a firm where output is contractible. We develop a structural behavioral model that identifies workers’ optimal reaction to monetary gifts received from their employer. We estimate the model using data from two separate field experiments conducted within a tree‐planting firm. We use the estimated structural parameters to generalize beyond the experiment, simulating how workers would react to different gifts on the part of the firm, within different labor market settings. We find that gifts have a role to play within this firm, increasing in importance when the workers’ outside alternatives deteriorate. Profit‐maximizing gifts would increase profits within slack labor markets by up to 10% on average and by up to 17% for certain types of workers.

Suggested Citation

Bellemare, Charles and Shearer, Bruce, On the Relevance and Composition of Gifts within the Firm: Evidence from Field Experiments (August 2011). International Economic Review, Vol. 52, Issue 3, pp. 855-882, 2011, Available at SSRN: https://ssrn.com/abstract=1919426 or http://dx.doi.org/10.1111/j.1468-2354.2011.00652.x

Charles Bellemare (Contact Author)

Université Laval - Département d'Économique ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada

Centre Interuniversitaire sur le Risque, les Politiques Economiques et l'Emploi (CIRPÉE)

Pavillon De Sève
Ste-Foy, Quebec G1K 7P4
Canada

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Bruce Shearer

Université Laval - Département d'Économique ( email )

2325 Rue de l'Université
Ste-Foy, Quebec G1K 7P4 G1K 7P4
Canada
418-656-2131 (Phone)
418-656-7798 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
1
Abstract Views
243
PlumX Metrics