Abstract

There exists a widespread perception that heterogeneity in the moral characteristics of jobs and workers interact to produce differential selection by immoral individuals into jobs that require performing immoral acts. Moreover, aversion among many individuals to performing such acts may contribute to immorality wage premiums, a form of compensating differential. However, the evidence of such relationships is scarce and limited to correlational studies of perceived sector immorality and wages. We use surveys, laboratory experiments and labor-market data to investigate the interaction between individuals’
concerns for morality and outcomes in real and laboratory labor markets. We obtain two measures of an individual’s aversion to performing immoral acts, one from a behavioral laboratory task and the other from a series of survey items; the two measures correlate significantly with each other. These two measures also correlate with laboratory labor market outcomes and expected outcomes in real labor markets, but only for “immoral” work. In the laboratory, immoral types are more likely to be employed and obtain higher wages when a job requires performing immoral acts. In our survey data, immoral types express a greater willingness to work in firms and industries rated as immoral in an independent survey; thus, the labor-market sorting of immoral types may offer a means of identifying those jobs with inherently immoral acts. We also document that wages are higher in such immoral industries.