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IZA Discussion Paper No. 18096
August 2025
Unfair Chances and Labor Supply
Nickolas Gagnon, Kristof Bosmans, Arno Riedl

We conduct an online experiment to study how the unfairness of chances leading to wage inequality affects labor supply decisions. We find that, at a given wage, disadvantageous wage inequality reduces labor supply, but whether this inequality stems from fair or unfair chances does not matter. That is, a procedure with fair chances does not compensate for wage inequality. Our results stand in stark contrast to prior empirical evidence showing that individuals care about fair chances when making equity judgments.

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