Respectful environments are both ethical and economically efficient, while hostile workplaces raise costs and reduce talent
Nearly one in five workers worldwide reports having experienced physical or psychological violence or harassment at work. Among people who change jobs, hostile workplace conditions are the second most common reason for leaving, after pay. Yet we still know little about how much people value workplaces free of hostility and how perceptions of workplace hostility affect initial career choices, especially for young workers, who often lack firsthand experience and must rely on reputation, word of mouth, or expectations when choosing jobs.
Our recent IZA Discussion Paper provides new evidence on this issue. We conducted a large choice experiment with more than 2,000 participants who were recent graduates, senior students, and alumni from a major Canadian university. Participants were asked to choose between pairs of hypothetical jobs that differed in pay, work arrangements (such as remote or hybrid work), and three forms of workplace hostility: social exclusion, aggressive behaviour, and sexual harassment.
The results show that workers place a very high value on avoiding hostile work environments. Many are willing to give up a substantial share of their wages to do so. On average, respondents would forgo about 14% of their pay for an inclusive workplace, 19% to avoid aggressive behavior, and as much as 31% to avoid workplaces that tolerate sexual harassment. These figures are far larger than the roughly 7% wage premium workers attach to hybrid work arrangements, highlighting that workplace culture matters at least as much as flexibility.
Both men and women strongly dislike hostile environments, but women do so much more. Women are willing to give up more pay than men to avoid sexual harassment, and they report higher perceived risks of hostility, especially those graduating in male-dominated fields such as STEM, business, and economics.
These preferences have real consequences for careers. When we followed student participants two years later, we found that those working in female-dominated industries had shown a higher willingness to pay to avoid sexual harassment at graduation, even after accounting for their field of study. More strikingly, students who perceived a higher personal risk of sexual harassment at graduation earned about 10% less two years later, a penalty larger than the overall early-career gender pay gap in our sample.
We also find that remote and hybrid work play a particular role in hostile environments. Women value hybrid work twice as much when a workplace tolerates sexual harassment, while men’s preferences are largely unchanged. Moreover, women are more likely to adjust their job search, avoid certain workplaces, or even skip networking events and professional opportunities to protect themselves from hostile situations. These avoidance strategies can accumulate into long-term career disadvantages.
The policy implications are significant. For employers, workplace culture is not a “soft” issue. Hostile environments impose real economic costs through higher wage demands, reduced talent pools, and increased turnover. Creating workplaces free of hostility is not only ethical, but also economically efficient.
For policymakers, especially those debating return-to-office mandates, our findings suggest caution. Remote work may function as a protective response to workplace hostility, not merely a preference for flexibility. Ignoring this may disproportionately harm workers already exposed to greater risks.
Finally, our study helps explain why hostile workplaces persist despite legal protections. Job seekers often lack reliable information before accepting a position, and those with negative experiences may hesitate to speak out. Even so, workers act on their perceptions, and these perceptions shape careers for years to come.
© Clémentine Van Effenterre and Manuela R. Collis
Clémentine Van Effenterre is Assistant Professor at the University of Toronto, Canada, and IZA@LISER Research Fellow
Manuela R. Collis is a PhD candidate in Strategic Management at the Rotman School of Management, University of Toronto, Canada
Please note:
We recognize that World of Labour articles may prompt discussion and possibly controversy. Opinion pieces, such as the one above, capture ideas and debates concisely, and anchor them with real-world examples. Opinions stated here do not necessarily reflect those of the LISER.
Related World of Labour content:
https://wol.iza.org/articles/eliminating-discrimination-in-hiring-isnt-enough by Mackenzie Alston
https://wol.iza.org/articles/sexual-harassment-in-the-workplace by Joni Hersch
https://wol.iza.org/articles/employers-and-the-gender-wage-gap by John Forth and Nikolaos Theodoropoulos
Photo by Nattakorn Maneerat on iStock