Kaur, Kremer, and Mullainathan (2010) on Self-Control at Work

Supreet Kaur, Michael Kremer, and Sendhil Mullainathan, “Self-Control and the Development of Work Arrangements.” American Economic Review 100: 624-628, May 2010.

• The starting point is the notion that self-control shortcomings make it likely that workers will not work as hard as THEY would like – and workplace organization can counteract these self-control problems. 

• Once again we are faced with the welfare question of whose side we are on, the patient long-run worker or the present-biased worker who makes all the current decisions. 

• Work often involves a long lag between effort and reward; regular pay can reduce that lag for a worker. 

• Having the work pace set by some outside force (the assembly line) is a type of commitment device.

• The production setting can involve cues such as uniforms that might promote work effort. 

• Co-workers will be the source of peer effects, which can operate through various channels, including emulation and monitoring; the peer effects might or might not contribute to production efficiency. 

• The article describes an experiment with Indian piece-rate workers engaged in data entry. Instead of the standard piece-rate, they could choose a target output, and be penalized (by losing half their wages) if they failed to reach it. About one-third of those offered these commitment contracts accepted them.