The pay-off of identity-enhancing human resource management practices: theory and evidence from Latin America

Available from: 
October 2013
Paper author(s): 
Juan Chaparro (University of Minnesota)
Eduardo Lora (Independent Researcher)
Topic: 
Labor
Year: 
2013

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 how firms choose identity-enhancing human resource management (HRM) practices, 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 Latin American countries, the main predictions of the model are tested using propensity score matching. The pay-off of HRM practices that foster workers’ identity with their jobs is found to be substantial for both workers and their firms.

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Research section: 
Lacea 2013 annual meeting
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