When 3+1 > 4: Gift Structure and Reciprocity in the Field

Do higher wages elicit reciprocity and lead to increased productivity? In a field experiment with 266 employees, we find that paying higher wages, per se, does not have a discernible effect on productivity (in a context with no future employment opportunities). However, structuring a portion of the wage as a clear and unexpected gift-by offering a raise (with no additional conditions) after the employee has accepted the contract-does lead to higher productivity for the duration of the job. Gifts are roughly as efficient as hiring more workers.