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Do Good Job Conditions Matter for Wages and Productivity? Theory and Evidence from Latin America

Author

Listed:
  • Juan Chaparro

    (EAFIT University)

  • Eduardo Lora

    (Harvard University)

Abstract

Based on Akerlof and Kranton (2005) In Journal of Economic Perspectives, 19(1), 9–32, 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 and wages 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.

Suggested Citation

  • Juan Chaparro & Eduardo Lora, 2017. "Do Good Job Conditions Matter for Wages and Productivity? Theory and Evidence from Latin America," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 12(1), pages 153-172, March.
    • Handle: RePEc:spr:ariqol:v:12:y:2017:i:1:d:10.1007_s11482-016-9489-0
    DOI: 10.1007/s11482-016-9489-0
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    References listed on IDEAS

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    More about this item

    Keywords

    Job conditions; Human resources management; Labor productivity; Identity economics; Propensity score matching; Latin America;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • M54 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Labor Management
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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