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Do Factory Managers Know What Workers Want? Manager–Worker Information Asymmetries and Pareto Optimal Human Resource Management Policies

Author

Listed:
  • Paris Adler
  • Drusilla Brown

    (Department of Economics, Tufts University)

  • Rajeev Dehejia

    (Robert F. Wagner Graduate School of Public Service, New York University)

  • George Domat
  • Raymond Robertson

    (Bush School of Government and Public Service, Texas A&M University)

Abstract

This paper evaluates the conjecture that factory managers may not be offering a cost-minimizing configuration of compensation and workplace amenities by using manager and worker survey data from Better Work Vietnam. Working conditions are found to have a significant positive impact on global life assessments and reduce measures of depression and traumatic stress. We find significant deviations in manager perceptions of working conditions from those of workers. These deviations significantly impact a worker's perception of well-being and indicators of mental health. Such deviations may lead the factory manager to underprovide certain workplace amenities relative to the cost-minimizing configuration, which may in part explain the persistence of relatively poor working conditions in developing economies.

Suggested Citation

  • Paris Adler & Drusilla Brown & Rajeev Dehejia & George Domat & Raymond Robertson, 2017. "Do Factory Managers Know What Workers Want? Manager–Worker Information Asymmetries and Pareto Optimal Human Resource Management Policies," Asian Development Review, MIT Press, vol. 34(1), pages 65-87, March.
    • Handle: RePEc:tpr:adbadr:v:34:y:2017:i:1:p:65-87
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    Citations

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    Cited by:

    1. Węziak-Białowolska, Dorota & Białowolski, Piotr & McNeely, Eileen, 2020. "The impact of workplace harassment and domestic violence on work outcomes in the developing world," World Development, Elsevier, vol. 126(C).

    More about this item

    Keywords

    apparel; human resource management; working conditions; Viet Nam;
    All these keywords.

    JEL classification:

    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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