The Economic Payoff of Creating Good Job Conditions: Theory and Evidence from Latin America


  • 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota


  • Based on Akerlof and Kranton (2005), 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, workers’ labor income and productivity 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.

fecha de publicación

  • 2014

Líneas de investigación

  • International Development
  • Labor and Human Capital
  • Productivity Analysis


  • 169810