Quitting and Peer Effects at Work

Julie Rosaz (), Robert Slonim and Marie Claire Villeval

No 6475, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: quits; communication; peer effects; experiment; feedback (search for similar items in EconPapers)
JEL-codes: C91 D83 J28 J63 J81 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2012-04
New Economics Papers: this item is included in nep-bec, nep-exp, nep-hrm, nep-lab and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published - revised version published in: Labour Economics, 2016, 39, 55-67

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Related works:
Journal Article: Quitting and peer effects at work (2016)
Working Paper: Quitting and peer effects at work (2016)
Working Paper: Quitting and Peer Effects at Work (2015)
Working Paper: Quitting and Peer Effects at Work (2012)
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