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Quitting and Peer Effects at Work

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Author Info

  • Rosaz, Julie

    ()
    (University of Montpellier 1)

  • Slonim, Robert

    ()
    (University of Sydney)

  • Villeval, Marie Claire

    ()
    (CNRS, GATE)

Abstract

While peer effects have been shown to affect worker's productivity when workers are paid a fixed wage, there is little evidence on their influence on quitting decisions. This paper presents results from an experiment in which participants receive a piece-rate wage to perform a real-effort task. After completing a compulsory work period, the participants have the option at any time to continue working or quit. To study peer effects, we randomly assign participants to work alone or have one other worker in the room with them. When a peer is present, we manipulate the environment by giving either vague or precise feedback on the co-worker's output, and also vary whether the two workers can communicate. We find that allowing individuals to work with a co-worker present does not increase worker's productivity. However, the presence of a peer in all working conditions causes workers to quit at more similar times. When, and only when, communication is allowed, workers are significantly more likely to (1) stay longer if their partner is still working, and (2) work longer the more productive they are. We conclude that when workers receive a piece-rate wage, critical peer effects occur only when workers can communicate with each other.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 6475.

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Length: 47 pages
Date of creation: Apr 2012
Date of revision:
Handle: RePEc:iza:izadps:dp6475

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Keywords: experiment; peer effects; communication; quits; feedback;

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References

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  1. Ryo Nakajima, 2004. "Measuring Peer Effects on Youth Smoking Behavior," ISER Discussion Paper 0600, Institute of Social and Economic Research, Osaka University.
  2. repec:kap:expeco:v:11:y:2008:i:2:p:134-153 is not listed on IDEAS
  3. Alexandre Mas & Enrico Moretti, 2006. "Peers at Work," NBER Working Papers 12508, National Bureau of Economic Research, Inc.
  4. Jonathan Guryan & Kory Kroft & Matthew J. Notowidigdo, 2009. "Peer Effects in the Workplace: Evidence from Random Groupings in Professional Golf Tournaments," American Economic Journal: Applied Economics, American Economic Association, vol. 1(4), pages 34-68, October.
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  7. Orana Bandiera & Iwan Barankay & Imran Rasul, 2005. "Social preferences and the response to incentives: Evidence from personnel data," Natural Field Experiments 00212, The Field Experiments Website.
  8. Manski, C.F., 1991. "Identification of Endogenous Social Effects: the Reflection Problem," Working papers, Wisconsin Madison - Social Systems 9127, Wisconsin Madison - Social Systems.
  9. Andrea Ichino & Giovanni Maggi, 1999. "Work Environment and Individual Background: Explaining Regional Shirking Differentials in a Large Italian Firm," NBER Working Papers 7415, National Bureau of Economic Research, Inc.
  10. Stark, Oded & Taylor, J Edward, 1991. "Migration Incentives, Migration Types: The Role of Relative Deprivation," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 101(408), pages 1163-78, September.
  11. Tor Eriksson & Anders Poulsen & Marie-Claire Villeval, 2008. "Feedback and Incentives : Experimental Evidence," Post-Print halshs-00276396, HAL.
  12. Kandel, E. & Lazear, E.P., 1990. "Peer Pressure and Partnerships," Papers, Rochester, Business - Managerial Economics Research Center 90-07, Rochester, Business - Managerial Economics Research Center.
  13. Muriel Niederle & Lise Vesterlund, 2005. "Do Women Shy Away From Competition? Do Men Compete Too Much?," NBER Working Papers 11474, National Bureau of Economic Research, Inc.
  14. repec:bla:restud:v:74:y:2007:i:3:p:897-935 is not listed on IDEAS
  15. Charles F. Manski, 2000. "Economic Analysis of Social Interactions," NBER Working Papers 7580, National Bureau of Economic Research, Inc.
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