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Social Ties at Work and Effort Choice: Experimental Evidence from Tanzania

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Listed:
  • Martin Chegere
  • Paolo Falco
  • Andreas Menzel

Abstract

Many firms hire workers via social networks. Whether workers who are socially connected to their employers exert more effort on the job is an unsettled debate. We address this question through a novel experiment with small-business owners in Tanzania. Participants are paired with a worker who conducts a real-effort task, and receive a payoff that depends on the worker’s effort. Some business owners are randomly paired with workers they are socially connected with, while others are paired with strangers. With a design that is sufficiently powered to detect economically meaningful effects, we find that being socially connected to one’s employer does not affect workers’ effort.

Suggested Citation

  • Martin Chegere & Paolo Falco & Andreas Menzel, 2023. "Social Ties at Work and Effort Choice: Experimental Evidence from Tanzania," CERGE-EI Working Papers wp763, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    • Handle: RePEc:cer:papers:wp763
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    More about this item

    Keywords

    firms; hiring; productivity; social ties; kinship networks;
    All these keywords.

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • M51 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Firm Employment Decisions; Promotions
    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior

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