Does Increased Exposure to Peers with Adverse Characteristics Reduce Workplace Performance? Evidence from a Natural Experiment in the US Army

Francis Murphy

Journal of Labor Economics, 2019, vol. 37, issue 2, 435 - 466

Abstract: While much research has investigated peer effects in education, less is known about peer influence at work, particularly how bad peers affect other workers. I study soldiers during a time when the US Army granted large numbers of morality waivers to recruits with felony or misdemeanor convictions that normally preclude enlistment. I find that soldiers randomly assigned to larger shares of peers with criminal backgrounds are more likely to commit major misconduct. Additionally, that misconduct often occurs in the same month a waivered peer commits misconduct, suggesting that influence occurs through both exposure to adverse peers and their contemporaneous behavior.

Date: 2019
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