Peers and Motivation at Work: Evidence from a Firm Experiment in Malawi

Abstract

This paper studies workplace peer effects by randomly varying work assignments at a tea estate in Malawi. We find that increasing mean peer ability by 10 percent raises productivity by 0.3 percent. This effect is driven by the responses of women. Neither production nor compensation externalities cause the effect because workers receive piece rates and do not work in teams. Additional analyses provide no support for learning or socialization as mechanisms. Instead, peer effects appear to operate through "motivation": given the choice to be reassigned, most workers prefer working near high-ability co-workers because these peers motivate them to work harder.

Peers in the Field: The Role of Ability and Gender in Peer Effects among Agricultural Workers

“…Our identification strategy follows Mas and Moretti (2009), and allows us to directly address identification concerns that are a recurring theme in this literature (Manski 1993; Angrist 2014). Our main estimate is modestly larger than those found in prior studies using this identification approach (Mas and Moretti 2009; Brune, Chyn, and Kerwin 2020), suggesting that U.S. agricultural workers are particularly susceptible to peer influence. We conduct several robustness checks to systematically address common peer effect identification concerns and show that our findings are precisely estimated and consistent across specifications.…”

“…This would be consistent with prior work that has shown peer effects to be larger within social networks (Bandiera, Barankay, and Rasul 2010). Another possible explanation is that experience is a proxy for learning (Brune, Chyn, and Kerwin 2020), which would indicate that individuals are not only motivated by their peers but also learn from them.…”

“…Thus, the contemporaneous productivity of individual i cannot, by construction, influence the average peer permanent productivity in our model. This procedure follows multiple papers in the recent literature, notably Mas and Moretti (2009) and Brune, Chyn, and Kerwin (2020). 18…”

“…This paper adds new evidence to the literature on peer effects in settings ranging from teacher and student performance (Hoxby 2000; Sacerdote 2001; Jackson and Bruegmann 2009; Azoulay, Graff Zivin, and Wang 2010; De Grip, Sauermann, and Sieben 2016) to energy and water usage (Ayres, Raseman, and Shih 2012; Bollinger and Gillingham 2012; Costa and Kahn 2013; Dolan and Metcalfe 2015; Bollinger, Burkhardt, and Gillingham 2018; Gillingham and Tsvetanov 2018) to housing foreclosures (Towe and Lawley 2013) and medical decisions (Nair, Manchanda, and Bhatia 2010). Most directly, it contributes to the literature on peer effects in workplace settings (Gould and Winter 2009; Guryan, Kroft, and Notowidigdo 2009; Jackson and Bruegmann 2009; Mas and Moretti 2009; Azoulay, Graff Zivin, and Wang 2010; De Grip, Sauermann, and Sieben 2016; Arcidiacono, Kinsler, and Price 2017) and in agriculture (Foster and Rosenzweig 1995; Bandiera, Barankay, and Rasul 2010; Conley and Udry 2010; Amodio and Martinez‐Carrasco 2018; Brune, Chyn, and Kerwin 2020). Compared with the bulk of work on peer effects in agriculture, our paper is unique in that we focus on hired agricultural workers who are making short‐run decisions regarding their own effort and productivity rather than agricultural producers who are making longer run decisions about their production processes (Foster and Rosenzweig 1995; Conley and Udry 2010).…”

“…Similar to the mechanisms underlying peer effects in other contexts, peer effects among agricultural workers might be driven by either learning (Conley and Udry 2010; De Grip, Sauermann, and Sieben 2016) or various forms of social pressure (Bandiera, Barankay, and Rasul 2005; Mas and Moretti 2009; Bellemare, Lepage, and Shearer 2010). Several studies have evaluated peer effects among fruit and vegetable pickers in the UK, Peru, and Malawi (Bandiera, Barankay, and Rasul 2010; Amodio and Martinez‐Carrasco 2018; Brune, Chyn, and Kerwin 2020), but to the best of our knowledge, none have focused on U.S. agricultural workers.…”