Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/215236 
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12840
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper studies how asymmetric information over inputs affects workers' response to incentives and self-selection at the workplace. Using daily records from a Peruvian egg production plant, we exploit a sudden change in the worker salary structure and find that workers' effort, firm profits, and worker participation change differentially along the two margins of input quality and worker type. Firm profits increase differentially from high productivity workers, but absenteeism and quits of these workers also differentially increase. Evidence shows that information asymmetries over inputs between workers and managers shape the response to incentives and self-selection at the workplace.
Subjects: 
asymmetric information
input heterogeneity
incentives
self-selection
JEL: 
D22
D24
J24
J33
M11
M52
M54
O12
Document Type: 
Working Paper

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