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Workplace Democracy in the Lab

  • Mellizo, Philip

    ()

    (College of Wooster)

  • Carpenter, Jeffrey P.

    ()

    (Middlebury College)

  • Matthews, Peter Hans

    ()

    (Middlebury College)

While intuition suggests that empowering workers to have some say in the control of the firm is likely to have beneficial incentive effects, empirical evidence of such an effect is hard to come by because of numerous confounding factors in the naturally occurring data. We report evidence from a real-effort experiment confirming that worker performance is sensitive to the process used to select the compensation contract. Groups of workers that voted to determine their compensation scheme provided significantly more effort than groups that had no say in how they would be compensated. This effect is robust to controls for the compensation scheme implemented and worker characteristics (i.e., ability and gender).

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5460.

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Length: 15 pages
Date of creation: Jan 2011
Date of revision:
Handle: RePEc:iza:izadps:dp5460
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  1. Pedro Dal Bo & Andrew Foster & Louis Putterman, 2007. "Institutions and Behavior: Experimental Evidence on the Effects of Democracy," Working Papers 2007-9, Brown University, Department of Economics.
  2. Frans van Dijk & Joep Sonnemans & Frans van Winden, 2000. "Incentive Systems in a Real Effort Experiment," CESifo Working Paper Series 272, CESifo Group Munich.
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