When Peers Count: Evidence from Randomized Peer Assignments in the Workplace∗

This paper explores how the ability of coworkers affects individual productivity. I study a seafood-processing plant in Vietnam, where workers process fish individually and are compensated based on own output. Input (steamed fish) is allocated in groups (worktables), which on average consists of four workers. Managers keep track of each group’s progress to ensure that input is allocated according to its work speed. For a period of five months, workers were randomly assigned to worktables on a daily basis. Using random variation in coworker composition, I find that an increase in the ability of coworkers at the same worktable leads to a decrease in worker productivity, measured as kilograms of fish processed per hour. This productivity decline is shown to be mitigated when a coworker is close to the focal worker either in physical distance or through a social tie. JEL Codes: J24, L23, M52. ∗I am extremely grateful to Seema Jayachandran, Lori Beaman, Jonathan Guryan, and Cynthia Kinnan for encouragement and support throughout this project. I am also indebted to Mathew Notowidigdo, Uta Schoenberg and seminar participants at Seoul National University, Yonsei Economic Research Institute Young Economist Workshop, KEA-APEA Joint International Conference, and the 2017 Asian Meeting of the Econometric Society for providing helpful comments. I also thank Nguyen Thi Diem for providing excellent research assistance. This work was made possible in part by a research grant from the Equality Development and Globalization Studies (EDGS) program, funded by the Rajawali Foundation in Indonesia, the Buffett Center Summer Research Grant, and Graduate Research Grant at Northwestern University. All errors are my own. †School of Economics and Finance, University of Hong Kong, Pokfulam Road, Hong Kong. Email: [email protected]