Fair Wages and Multiple Fairness Standards - A Lab Study of Co-Employment of Hired and Rented Hands

Abstract

We study the relevance of fairness norms in an experimental scenario in which hired and rented hands are co-employed and stochastic influences and multiple reference points for fairness further increase complexity. Co-employment of hired and rented hands is an example out of a broader class of situations with multiple fairness standards. Co-employment has high political relevance and topicality in Europe, and especially in Germany, where a new equal payment rule affecting temporary work agencies has become law. To shed new light on the relevance of fairness norms in complex settings, we explore theoretically and experimentally the possible fairness considerations of the participants.

Keywords: Fairness, Principal-agent Problem, Temporary Agency Work, Wage Discrimination

JEL Classification: C7, C91, D23