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Peer Effects in the Workplace

Author

Listed:
  • Thomas Cornelissen
  • Christian Dustmann
  • Uta Schönberg

Abstract

Existing evidence on peer effects in a work environment stems from either laboratory experiments or from real-word studies referring to a specific firm or specific occupation. Yet, it is unclear to what extent these findings apply to the labor market in general. In this paper, therefore, we investigate peer effects in the workplace for a representative set of workers, firms, and occupations with a focus on peer effects in wages rather than productivity. Our estimation strategy—which links the average permanent productivity of workers’ peers to their wages— circumvents the reflection problem and accounts for the endogenous sorting of workers into peer groups and firms. On average, we find only small peer effects in wages. We also find small peer effects in the type of high skilled occupations which more closely resemble those used in studies on knowledge spillover. In the type of low skilled occupations analyzed in existing studies on social pressure, in contrast, we find larger peer effects, about half the size of those identified in similar studies on productivity.

Suggested Citation

  • Thomas Cornelissen & Christian Dustmann & Uta Schönberg, 2013. "Peer Effects in the Workplace," CESifo Working Paper Series 4398, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_4398
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Julie Beugnot & Bernard Fortin & Guy Lacroix & Marie Claire Villeval, 2017. "Gender and Peer Effects on Performance in Social Networks," Working Papers halshs-00855047, HAL.
    2. Kießling, Lukas & Radbruch, Jonas & Schaube, Sebastian, 2018. "The Impact of Self-Selection on Performance," IZA Discussion Papers 11365, Institute for the Study of Labor (IZA).
    3. Beugnot, Julie & Fortin, Bernard & Lacroix, Guy & Villeval, Marie Claire, 2017. "Gender and Peer Effects in Social Networks," IZA Discussion Papers 10588, Institute for the Study of Labor (IZA).
    4. Brady, Ryan R. & Insler, Michael A. & Rahman, Ahmed S., 2017. "Bad Company: Understanding negative peer effects in college achievement," European Economic Review, Elsevier, vol. 98(C), pages 144-168.
    5. Horton, John J. & Zeckhauser, Richard J., 2016. "The Causes of Peer Effects in Production: Evidence from a Series of Field Experiments," Working Paper Series 16-027, Harvard University, John F. Kennedy School of Government.
    6. repec:eee:labeco:v:46:y:2017:i:c:p:47-63 is not listed on IDEAS
    7. repec:eee:labeco:v:46:y:2017:i:c:p:110-117 is not listed on IDEAS
    8. Battisti, Michele, 2017. "High wage workers and high wage peers," Labour Economics, Elsevier, vol. 46(C), pages 47-63.

    More about this item

    Keywords

    peer effects in the workplace;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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