Diversity in the Labour Market: The Role of Trade Unions, Creativity and Accent

Abstract

This thesis presents three pieces of empirical evidence, about aspects of the labour market that are likely to be associated with differentials in labour market outcomes for different sub-groups of workers.

Chapter 2 provides evidence on remuneration differentials associated with trade unions in China. The chapter investigates the union effect on the welfare of a particular group: rural-to-urban migrant workers in China. Using new individual-level panel data from the Rural-to-Urban Migration in China (RUMiC) survey, I find that migrant workers in establishments with a trade union presence receive more favourable remuneration than their counterparts in nonunion establishments. In particular, union-covered workers earn higher monthly income, are entitled to more forms of work-related insurance, and receive more valuable fringe benefits. Moreover, I also find a union-membership welfare premium when comparing union members with union covered non-members, a premium that likely arises due to variations in the activeness of workplace-level unions.

In chapter 3, I report the results of a novel laboratory experiment that investigates the impact of economic scarcity on a crucial but understudied input of labour production: creativity. Scarcity is introduced in the experiment through a randomly-applied negative shock to some subjects' experimental wealth, after which subjects are required (i) to make a decision that is potentially important to their wealth, and (ii) to perform a creative task and a 'mechanical' task. I find that, while boosting performance in the mechanical task, economic scarcity harms creative performance. This latter effect arises through a narrowly focused mindset rather than through cognitive depletion. For workers who face economic scarcity, either caused by their financial circumstances or a stimulation strategy, the results of this chapter suggest an impaired performance in jobs where performance depends on creativity. Thus, the impaired creativity is likely to disadvantage workers who experience scarcity in creativity-demanding occupations.

The fourth chapter uses another lab experiment to study accent-based discrimination in trust. Participants listen to an audio message from their opponent before they make decisions in the trust game. The audio clips are fictitious such that they are identical in the text but are delivered in two different accents. I include the Australian accent and the Chinese accent as accent variations in this study. Both Australian and Chinese participants rated all personal attributes of the Chinese accented speaker lower than the Australian accented speaker. While Chinese participants also send less to receivers with a Chinese accent, Australian participants show a similar level of trust towards both types of accents. The mistrust towards Chinese accent among Chinese participants is driven by Chinese participants who do not regard their innate identities as important. Trust is the essential foundation of economic transactions including transactions in the labour market. The results of this chapter imply that workers with Chinese accent may be disadvantaged in the Australian labour market, especially when interacting with certain sub-groups of employers of Chinese origin. Show more