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Quitting and Peer Effects at Work

Author

Listed:
  • 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.

Suggested Citation

  • Rosaz, Julie & Slonim, Robert & Villeval, Marie Claire, 2012. "Quitting and Peer Effects at Work," IZA Discussion Papers 6475, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp6475
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    References listed on IDEAS

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    Cited by:

    1. repec:clg:wpaper:2013-27 is not listed on IDEAS
    2. Mathieu Lefebvre & Pierre Pestieau & Arno Riedl & Marie Villeval, 2015. "Tax evasion and social information: an experiment in Belgium, France, and the Netherlands," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 22(3), pages 401-425, June.
    3. repec:eee:eecrev:v:101:y:2018:i:c:p:528-545 is not listed on IDEAS
    4. Seda Ertac & Mert Gumren & Levent Kockesen, 2017. "Strategic Feedback in Teams: Theory and Experimental Evidence," Koç University-TUSIAD Economic Research Forum Working Papers 1714, Koc University-TUSIAD Economic Research Forum.

    More about this item

    Keywords

    quits; communication; peer effects; experiment; feedback;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J28 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Safety; Job Satisfaction; Related Public Policy
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions

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