What motivates workers? One obvious answer is money. But people work for more than just a paycheck. People want to do their jobs well. They feel good when they impress their colleagues or see that their work benefits their communities. So, both monetary and social factors motivate workers, but which matters more?
A recent large-scale experiment found a clear winner. Economists asked over 10,000 people to do a mindless task—press the buttons "A" and "B" on their keyboards for 10 minutes. They tested whether paying people increased effort more than nudges from social psychology. The social nudges were things like turning button-pressing into a competition or a way to collect money for a good cause. The results showed that money increased effort much more than any of the social motivators. For example, workers pressed more buttons when they could earn a few extra cents for themselves than when they could earn 10 times more for charity.
Money Versus Social Nudges Across Cultures
My colleagues and I thought there was more to the story. We knew that the participants in their study were mostly Americans, but around 15% came from India. The economists combined the two samples, but we wondered whether the motivating power of money would be as strong in India as it was in the U.S.
We re-analyzed the original study, calculating each country's "money advantage": how much more motivating money was compared to non-monetary motivators. We found that money advantage was two times larger in the U.S. than in India.
Testing the Money Advantage Across Cultures
Basic economic logic says we shouldn't find this. People from a less-developed country should be more motivated to earn a dollar than people from a richer country. To make sure we were seeing something real, we hired over 8,000 people from China, India, Mexico, South Africa, the UK, and the U.S. to work on another boring task: people saw a bunch of images one by one and had to check whether each image contained a building.
Everyone got a small salary, and we explicitly told workers that rating 10 images was enough to receive it. To encourage workers to do more than this minimum, we offered some participants extra money for rating more images. Other participants received costless social nudges. For example, in one condition, we tried to establish a social norm to work hard by telling the workers that previous participants rated, on average, 160 images.
The money advantage was largest in the U.S. and the UK. For example, workers in China rated 20% more images when offered a monetary bonus. But that extra money boosted effort by 110% in the UK.
We suspect the reason behind our findings has to do with cultures having different defaults for how to interpret work. In most of the world, work is a relational obligation that goes beyond money and contracts: focusing only on maximizing earnings might prove socially costly, but doing more than what is required can earn you loyalty and trust.
In the Western capitalist vision, work is primarily transactional. Workers exchange time and effort for money, behaving more like economists say they should behave. Homo Economicus—that perfectly rational and self-interested fictional character from economics textbooks—stops working as soon as extra effort stops bringing material rewards. When we looked at the proportion of people who quit working exactly at the minimum needed to earn their salary, we found that most U.S. workers did just that, provided they weren't offered more money for trying harder. But in Mexico, 92% of workers continued even though they knew they wouldn't be paid more.
Is it Culture?
While cultural differences in our studies were large, we wanted to know whether it was really about culture determining one's relationship to work and not with something more mundane like how experienced people are at using their keyboards. We surveyed 2,000 bilingual Facebook users in India and asked half of them to complete the study in English and the other half in Hindi.
When people did our study in English, money was 52% more effective than a social norm to work hard. In Hindi, the money advantage was only 27%. When we asked workers whether they completed the task "only for money," they were much more likely to agree if they worked in English. English seemed to put people in the mindset of working primarily to get paid.
A Culture of Work
Depending on how you see it, you could say that the Western view equating work with compensation is money-obsessed and greedy. Or you could say it's rational and efficient. We think neither is entirely true. People are probably acting according to what their cultures teach and reward. In other words, people are more likely to become Homo Economicus in social environments that encourage being Homo Economicus.
For Further Reading
Medvedev, D., Davenport, D., Talhelm, T., & Li, Y. (2024). The motivating effect of monetary over psychological incentives is stronger in WEIRD cultures. Nature Human Behavior. https://doi.org/10.1038/s41562-023-01769-5
Danila Medvedev is a final-year PhD student in Behavioral Science at the University of Chicago Booth School of Business. He studies culture, motivation, and values.
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