Quitting and Peer Effects at Work

47 Pages Posted: 14 Apr 2012

See all articles by Julie Rosaz

Julie Rosaz

French National Center for Scientific Research (CNRS), Laboratoire d'Economie Théorique et Appliquée (LAMETA)

Robert Slonim

The University of Sydney; IZA Institute of Labor Economics

Marie Claire Villeval

Groupe d'Analyse et de Théorie Economique (GATE), CNRS; IZA Institute of Labor Economics; Global Labor Organization (GLO)

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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, peer effects, communication, feedback, experiment

JEL Classification: C91, D83, J63, J28, J81

Suggested Citation

Rosaz, Julie and Slonim, Robert and Villeval, Marie Claire, Quitting and Peer Effects at Work. IZA Discussion Paper No. 6475. Available at SSRN: https://ssrn.com/abstract=2039661

Julie Rosaz (Contact Author)

French National Center for Scientific Research (CNRS), Laboratoire d'Economie Théorique et Appliquée (LAMETA) ( email )

France

Robert Slonim

The University of Sydney ( email )

University of Sydney
Sydney, NC NSW 2006
Australia

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Marie Claire Villeval

Groupe d'Analyse et de Théorie Economique (GATE), CNRS ( email )

93, chemin des Mouilles
Ecully, 69130
France
+33 472 86 60 79 (Phone)
+33 472 86 60 90 (Fax)

HOME PAGE: http://www.gate.cnrs.fr/equipe/perso/villeval/villeval.html

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Global Labor Organization (GLO) ( email )

Collogne
Germany

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