Do workers pick up unethical practices from their colleagues?

Eric Gould, Todd Kaplan, Mon, 11/05/2007

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The importance of environment and how workers affect the productivity of co-workers through learning valuable skills and work habits is often stressed, but whether employees sometimes learn unethical practices from their peers in order to boost productivity is less well documented. The authors of CEPR DP6550 find that once a worker adopts questionable methods - which seem to be effective, competitive pressures may lead others to follow in order to get ahead, or perhaps just to stay even with other workers who are adopting similar techniques.

The authors investigate whether Jose Canseco, one of the top baseball players in the 1980s and 1990s, affected the productivity of his team-mates. In his autobiography, he claims not only to have taken steroids throughout his playing career, but also that he gave them to his colleagues. Canseco even named six famous power-hitters that he claims to have personally injected with steroids, and boasted that his influence was much wider than that. The hypothesis is tested using panel data on the performance of baseball players from 1997 to 2003. After controlling for the individual fixed-effect of each player, the analysis shows that a player’s performance significantly improved after being on the same team with Jose Canseco.

The results are smaller, but still significant, if the sample excludes the six players that Jose claims to have personally injected with steroids. Furthermore, after checking 30 comparable players from the same era, the authors find that no other baseball player generated a similar effect, thus indicating Jose Canseco had an unusual influence on the productivity of team-mates. The pattern indicates an increased power hitting performance, which is consistent with his claims that he helped his team-mates increase their physical strength by introducing them to steroids. However, it is also possible that his colleagues benefited from his workout habits, batting technique and work ethic. Overall, the paper highlights the idea that in the absence of a rigid and persistent enforcement mechanism over unethical behaviour, market forces could lead to a ‘rat race’ where workers are willing to do just about anything to remain competitive.

DP6550 Learning Unethical Practices from a Co-worker: The Peer Effect of Jose Canseco

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URL:  http://www.cepr.org/pubs/new-dps/dplist.asp?dpno=6550.asp

Topics:  Labour markets

Tags:  Corruption, crime, Peer Effects

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