Do workers discriminate against their out-group Employers? Evidence from an Online Platform Economy

Authors: Sher Afghan Asad, Ritwik Banerjee, Joydeep Bhattacharya

ABSTRACT:

We study possible worker-to-employer discrimination manifested via social preferences. We run a well-powered, model-based experiment, wherein we recruit 6,000 white American workers from Amazon’s M-Turk platform for a real-effort task. We randomly (and unobtrusively) reveal the racial identity of their non-fictitious employer, who may either be white or black. We find evidence of race-based altruism towards black employers. However, the workers display significant racial discrimination in reciprocity – a small gift induces workers to put higher effort for white employers relative to black. Our results suggest that taste-based discrimination favoring ingroup can have significant adverse effects on outgroup employers.