The Economic Payoff of Creating Good Job Conditions: Theory and Evidence from Latin America

Juan Chaparro and Eduardo Lora

No 169810, 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota from Agricultural and Applied Economics Association

Abstract: Based on Akerlof and Kranton (2005), 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, workers’ labor income and productivity 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: International Development; Labor and Human Capital; Productivity Analysis (search for similar items in EconPapers)
Pages: 37
Date: 2014
New Economics Papers: this item is included in nep-hrm, nep-lab and nep-lam
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea14:169810

DOI: 10.22004/ag.econ.169810

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