Sorting and Wage Premiums in Immoral Work

We use surveys, laboratory experiments and administrative labor-market data to study howheterogeneity in the perceived immorality of work and in workers' aversion to acting immorallyinteract to impact labor market outcomes. Specifically, we investigate whether those individualsleast concerned with acting morally select into jobs generally perceived as immoral and whetherthe aversion among many individuals to performing such acts contributes to immorality wagepremiums, a form of compensating differential. We show that immoral work is associated withhigher wages, both using correlational evidence from administrative labor-market data and causalevidence from a laboratory experiment. We also measure individuals' aversion to performingimmoral acts and show that those who find immoral behavior least aversive are more likely to beemployed in immoral work in the lab and have a relative preference for work perceived as immoraloutside the laboratory. We note that sorting by “immoral” types into jobs that can cause harm maybe detrimental for society. Our study highlights the value of employing complementary researchmethods