Expectations, Wage Hikes, and Worker Voice

Working Paper
Published on 7 May 2020

Abstract

Hirschman's (1970) seminal thesis that enabling worker "voice" prevents exit from the employment relationship has played a foundational role in labor economics. Adhvaryu, Molina and Nyshadham (2020) provide the first experimental test of this hypothesis in a real-world setting via a randomized controlled trial in Indian garment factories. Just after what proved to be a disappointing wage hike, workers were chosen at random to participate in an anonymous survey in which they were asked for feedback on job conditions, supervisor performance, and overall job satisfaction. Enabling voice in this manner reduced turnover and absenteeism after the hike, particularly for the most disappointed workers.

Authors

Achyuta Adhvaryu

University of Michigan

Teresa Molina

University of Hawai'i at Manoa

Anant Nyshadham

University of Michigan