This paper argues that consumer demand for unethical behavior such as fraud can impact employee turnover through market and psychological forces. Widespread conditions of unethical demand can improve career prospects for employees of unethical firms through higher income and stability associated with firm financial health. Similarly, unethical employees enjoy increased tenure from the financial and psychological rewards of prosocial behavior toward customers demanding corrupt or unethical behavior. We specifically examine the well-documented unethical demand for fraud in the vehicle emissions testing (...) industry, and its impact on employee tenure. We use data from tests conducted by several thousand licensed inspectors to demonstrate that fraudulent employees and employees of fraudulent firms enjoy longer tenure. These results suggest further work to separate the multiple psychological and economic mechanisms likely driving our findings. (shrink)

Unethical and dishonest behavior has increasingly attracted the attention of scholars from various disciplines. Recent work has begun to focus on a previous overlooked factor predicting dishonest behavior: the beneficiary or victim of dishonest acts. In two laboratory experiments, we manipulate the level of resources allocated to our participants (their "wealth") and investigate whether perceived inequity from wealth that is randomly or subjectively assigned leads individuals to cross ethical boundaries through helping or hurting others. The results show that dishonest behavior (...) is influenced by positive and negative inequity that motivates helping and hurting acts. Furthermore, a third experiment shows that people tend to discount the wrongness of crossing ethical boundaries to hurt or help others when the action restores equity. (shrink)