The hidden costs of corporate social responsibility

By economists Guglielmo Briscese, Nick Feltovich and Robert Slonim.

 "Companies often engage in activities of corporate social responsibility such as donating a share of profits to charity. Previous research suggests these initiatives can help attract and motivate workers, even at the cost of giving up part of their compensation. This column presents experimental evidence that shows, however, that when workers can choose who they want to work for, they prefer firms that offer a higher wage, and are attracted by a firm’s corporate social responsibility only when they consider their wage offer as ‘fair’. Further, if companies compensate donations to charity by reducing workers’ wages, this could ultimately harm workers’ wellbeing, depending on the worker’s views on the donations." 

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