Do Good Job Conditions Matter for Wages and Productivity? Theory and Evidence from Latin America

Juan Chaparro and Eduardo Lora

Applied Research in Quality of Life, 2017, vol. 12, issue 1, No 10, 153-172

Abstract: Abstract Based on Akerlof and Kranton (2005) In Journal of Economic Perspectives, 19(1), 9–32, who argue that group identity and social norms influence individual preferences towards work effort, a model is developed to understand why firms create good job conditions, taking into account the cost of implementing them and their impact on wages and productivity. Then, using individual-level data from the Gallup World Poll for 18 Latin American countries, the main predictions of the model are tested using propensity score matching. We find a positive link between good job conditions and wages when there are several simultaneous signals of a good work environment. We conclude that there is a positive payoff of investing in good job conditions for both workers and firms.

Keywords: Job conditions; Human resources management; Labor productivity; Identity economics; Propensity score matching; Latin America (search for similar items in EconPapers)
JEL-codes: J24 J64 M12 M54 O54 (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1007/s11482-016-9489-0

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