Effect of mood and worker incentives on workplace productivity. Decio Coviello, Erika Deserranno, Nicola Persico, Paola Sapienza. The Journal of Law, Economics, and Organization, ewac017, September 26 2022. https://doi.org/10.1093/jleo/ewac017
Abstract: We study the causal effect of mood on the productivity of call-center workers. Mood is measured through an online “mood questionnaire” which the workers are encouraged to fill out daily. We find that better mood actually decreases worker productivity for workers whose compensation is largely fixed. The negative effect of mood is attenuated for workers whose compensation is based on performance (high-powered incentives). This finding holds both at a correlational level and in two IV settings, where mood is instrumented for by weather or, alternatively, by whether the local professional sports team played/won the day before. We rule out a number of threats to the exclusion restrictions, and discuss the mechanisms that could generate our findings
JEL: J24, J28, M52, C26
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