Peers and Motivation at Work: Evidence from a Firm Experiment in Malawi

Abstract

This paper sheds light on workplace peer effects by analyzing an experiment at a tea estate in Malawi. We randomly allocated tea-harvesting workers to fields and find strong evidence of positive effects from working near higher-ability peers. Our analy­sis shows that increasing the average of co-worker ability by 10 percent increases own productivity by 0.3 percent. In contrast to previous studies, we rule out that produc­tion or compensation externalities drive our results because workers receive piece-rates and do not work in teams. Additional analysis provides no support for the hypothesis that learning or worker socialization drive the effects. Instead, we provide suggestive evidence that workers view co-workers as a source of motivation. When given a choice to be re-assigned, the majority of workers want to work near fast (high-ability) co-workers. In open-ended survey responses, respondents state that being near faster peers provides motivation to work harder.