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Peers at Work
Alexandre Mas, Enrico Moretti
American Economic Review. Feb 2009, Vol. 99, No. 1: Pages 112-145

Peers at Work

Alexandre Mas, 1

1Haas School of Business, 545 Student Services Building #1900, University of California, Berkeley, CA 94720-1900.

Enrico Moretti2

2Department of Economics, 637 Evans Hall #3880, University of California, Berkeley, CA 94720-3880.

Abstract

We study peer effects in the workplace. Specifically, we investigate whether, how, and why the productivity of a worker depends on the productivity of coworkers in the same team. Using high-frequency data on worker productivity from a large supermarket chain, we find strong evidence of positive productivity spillovers from the introduction of highly productive personnel into a shift. Worker effort is positively related to the productivity of workers who see him, but not workers who do not see him. Additionally, workers respond more to the presence of coworkers with whom they frequently interact. We conclude that social pressure can partially internalize free-riding externalities that are built into many workplaces. (JEL J24, L81, M54)