Three essays in labour economics

Abstract

The purpose of this thesis, consisting of three unique papers, is to study how workers react to exogenous and endogenous policy changes keeping in view different perspectives. In the first paper, I conduct a lab experiment consisting of two treatments to examine how the introduction of a minimum wage affects the wage offers and wage demands of workers who are not bound by the minimum wage, based on horizontal fairness. In the first treatment, I focus on how workers already earning higher wages than the minimum wage level react to the minimum wage introduction, whereas for the second treatment, I focus on how workers earning less than the minimum wage level react to the minimum wage introduction in another sector. The results from the first treatment show that wage demands and wage offers increase after the minimum wage introduction whereas results from the second treatment show that there is no significant effect of the minimum wage introduction on the wage demands or wage offers. The second paper deals with how increase in the minimum wage affects workers’ performance, if workers are paid a fixed wage equalling the minimum wage and the piece rate together. The study is based on a unique dataset obtained from a Turkish company. The results show that there are mixed effects of the increase in minimum wage on workers’ overall performance. However, when workers are classified as low and high productivity worker, it is observed that low productivity workers increase their performance while high productivity workers decrease their performance. The third study focuses on the tournament incentives and peer effects in the workplaces. The aim of this study is to disentangle the effect of observing the others and being observed by the others during the tournament with a lab experiment. The results show that neither observing nor being observed generate negative peer effects. In addition, being observed leads to underdogs increasing their performance.

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ORCID for Michael Vlassopoulos: orcid.org/0000-0003-3683-1466

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