American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Peer Effects in the Workplace
American Economic Review
vol. 107,
no. 2, February 2017
(pp. 425–56)
Abstract
Existing evidence on peer effects in the productivity of coworkers stems from either laboratory experiments or real-world studies referring to a specific firm or occupation. In this paper, we aim at providing more generalizable results by investigating a large local labor market, with a focus on peer effects in wages rather than productivity. Our estimation strategy--which links the average permanent productivity of workers' peers to their wages--circumvents the reflection problem and accounts for endogenous sorting of workers into peer groups and firms. On average over all occupations, and in the type of high-skilled occupations investigated in studies on knowledge spillover, we find only small peer effects in wages. In the type of low-skilled occupations analyzed in extant studies on social pressure, in contrast, we find larger peer effects, about one-half the size of those identified in similar studies on productivity.Citation
Cornelissen, Thomas, Christian Dustmann, and Uta Schönberg. 2017. "Peer Effects in the Workplace." American Economic Review, 107 (2): 425–56. DOI: 10.1257/aer.20141300Additional Materials
JEL Classification
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials
- J41 Labor Contracts
- M12 Personnel Management; Executives; Executive Compensation
- M54 Personnel Economics: Labor Management