Weather Conditions and Productivity

People believe that weather conditions influence their everyday work life, but to date, little is known about how weather affects individual productivity. Most people believe that bad weather conditions reduce productivity. In this research, we predict and find just the opposite. Drawing on cognitive psychology research, we propose that bad weather increases individual productivity by eliminating potential cognitive distractions resulting from good weather. When the weather is bad, individuals may focus more on their work rather than thinking about activities they could engage in outside of work. We tested our hypotheses using both field and lab data. First, we use field data on employees’ productivity from a mid-size bank in Japan, which we then match with daily weather data to investigate the effect of bad weather conditions (in terms of precipitation, visibility, and temperature) on productivity. Second, we use a laboratory experiment to examine the psychological mechanism explaining the relationship between bad weather and increased productivity. Our findings support our proposed model and suggest that worker productivity is higher on bad rather than good weather days. We discuss the implications of our findings for workers and managers.

That is from a paper in the J Appl Psychol. A draft is here. That is "the problem," in the tropics there is generally good weather.

More interesting papers by one of the co-authors, Francesca Gino, are here. 

How Winning the Fields Medal Affects Scientific Output

Research productivity usually falls after scientists receive a Nobel Prize (Zuckerman, 1967), and that is because their obligations and activities change. It turns out that the same happens to mathematicians who win the Field Medal, although productivity declines for a different reason. 

From a paper by George J. Borjas and Kirk B. Doran

The abstract 

Knowledge generation is key to economic growth, and scientific prizes are designed to encourage it. But how does winning a prestigious prize affect future output? We compare the productivity of Fields medalists (winners of the top Mathematics prize) to that of similarly brilliant contenders. The two groups have similar publication rates until the award year, after which the winners’ productivity declines. The medalists begin to “play the field,” studying unusual topics at the expense of writing papers. This strategy is consistent with a model of human capital investments under uncertainty: the wealth effect of the prize encourages riskier knowledge investments.

Getting tenure might have a similar effect, on average, on risk taking and productivity.  
HT: Jonas Holmstrom.

Credit status and productivity

Many employers screen new hires by examining the credit reports of job applicants. The practice has sparked debate, with opponents asserting that it amounts to discrimination and proponents maintaining that it is an important tool for employers to assure the quality of new employees. To date, little evidence exists on the validity of credit status as a screening device. The issue is complicated by the potential endogeneity of credit measures to labor market outcomes. This paper develops a typology of employer beliefs and a unique identification strategy to test whether credit status is predictive of employee productivity. The paper finds that the character-related portion of credit status is not a significant predictor of worker productivity.

Source.  

Does Management Matter? (India)

A long-standing question is whether differences in management practices across firms can explain differences in productivity, especially in developing countries where these spreads appear particularly large. To investigate this, we ran a management field experiment on large Indian textile firms. We provided free consulting on management practices to randomly chosen treatment plants and compared their performance to a set of control plants. We find that adopting these management practices raised productivity by 17% in the first year through improved quality and efficiency and reduced inventory, and within three years led to the opening of more production plants. Why had the firms not adopted these profitable practices previously? Our results suggest that informational barriers were the primary factor explaining this lack of adoption. Also, because reallocation across firms appeared to be constrained by limits on managerial time, competition had not forced badly managed firms to exit.

That is from a new published paper by Bloom, Eifert, Mahajan, McKenzie & Roberts (Quarterly Journal of Economics, 2013). The researchers used the services of an international consulting firm. The management "interventions:" factory operations, quality control, inventory, human resource management, and sales and order management.

They explain:

The first (and main) wave of the project ran from August 2008 to August 2010, with a total consulting cost of $1.3 million, approximately $75,000 per treatment plant and $20,000 per control plant. This is different from what the firms themselves would have to pay for this consulting, which the consultants indicated would be about $250,000.

Research Tribune (sport economics, gerontocracy)

 . . . celebrity endorsements are value enhancing events and damage to celebrity’s image has detrimental effects on company’s value. On the other hand, lack of robustness of this paper’s findings may suggest that the old adage “any publicity is good publicity” still holds true (Bartz, Molchanov, & Stork, December 2012).

. . . the older is the ruling class [in a country] the lower is the public investment in education and productive services (Atella & Carbonari, February 2013).

Productivity and working with spouses (India)

In Uttar Pradesh, teams of four are engaged to dig soil under the NREGA programme [National Rural Employment Guarantee Act]. In one treatment spouses work together; in the other treatment they work in separate teams. Working with spouses is associated with significantly higher output.

Te authors conclude

We find that teams with paired couples consistently outperform teams where spouses are separated from their partners. The output gap between the two systems is large, by approximately 50%.

Source: Munro, Verschoor, & Dubey (Economic Letters, March 2013). A draft (September 2012) is here. 

Does Productivity Decline after Promotion?

The results clearly show that the removal of extrinsic incentives following promotion does not lead to a fall in productivity in French academia. Source. 

I did not find an ungated draft. It was published here. 

Is U.S. Economic Growth Over?

This paper raises basic questions about the process of economic growth. It questions the assumption, nearly universal since Solow’s seminal contributions of the 1950s, that economic growth is a continuous process that will persist forever. There was virtually no growth before 1750, and thus there is no guarantee that growth will continue indefinitely. Rather, the paper suggests that the rapid progress made over the past 250 years could well turn out to be a unique episode in human history. The paper is only about the United States and views the future from 2007 while pretending that the financial crisis did not happen. Its point of departure is growth in per-capita real GDP in the frontier country since 1300, the U.K. until 1906 and the U.S. afterwards. Growth in this frontier gradually accelerated after 1750, reached a peak in the middle of the 20th century, and has been slowing down since. The paper is about “how much further could the frontier growth rate decline?” 

The analysis links periods of slow and rapid growth to the timing of the three industrial revolutions (IR’s), that is, IR #1 (steam, railroads) from 1750 to 1830; IR #2 (electricity, internal combustion engine, running water, indoor toilets, communications, entertainment, chemicals, petroleum) from 1870 to 1900; and IR #3 (computers, the web, mobile phones) from 1960 to present. It provides evidence that IR #2 was more important than the others and was largely responsible for 80 years of relatively rapid productivity growth between 1890 and 1972. Once the spin-off inventions from IR #2 (airplanes, air conditioning, interstate highways) had run their course, productivity growth during 1972-96 was much slower than before. In contrast, IR #3 created only a short-lived growth revival between 1996 and 2004. Many of the original and spin-off inventions of IR #2 could happen only once – urbanization, transportation speed, the freedom of females from the drudgery of carrying tons of water per year, and the role of central heating and air conditioning in achieving a year-round constant temperature. 

Even if innovation were to continue into the future at the rate of the two decades before 2007, the U.S. faces six headwinds that are in the process of dragging long-term growth to half or less of the 1.9 percent annual rate experienced between 1860 and 2007. These include demography, education, inequality, globalization, energy/environment, and the overhang of consumer and government debt. A provocative “exercise in subtraction” suggests that future growth in consumption per capita for the bottom 99 percent of the income distribution could fall below 0.5 percent per year for an extended period of decades.

That is from a new paper by Robert J. Gordon (August 2012) which has received a lot of attention. Many of the recent innovations in the US, such as Facebook or Google, are practically free for users, which means that it has been more difficult for these companies to seize the profits than it was for GM, for example, to seize the profits of auto sales. The nature of the goods is different. What we see however is that since people can use Facebook and Google in developing countries for free, these inventions are increasing productivity outside the US. Probably we are seen a new era in which the gains of productivity are being democratized around the word [which might benefit the US economy in the long run]. Thanks to the US for that!   

Basic managerial training and productivity

The vast majority of micro and small enterprises (MSEs) in developing countries are located in industrial clusters, and the majority of such clusters have yet to see their growth take off. The performance of MSE clusters is especially low in Sub-Saharan Africa. While existing studies often attribute the poor performance to factors outside firms, problems within firms are seldom scrutinized. In fact, entrepreneurs in these clusters are unfamiliar with standard business practices. Based on a randomized experiment in Ghana, this study demonstrates that basic-level management training improves business practices and performance.

That is the abstract of the paper "How Can Micro and Small Enterprises in Sub-Saharan Africa Become More Productive? The Impacts of Experimental Basic Managerial Training" by Mano et al. It was published in World Development. Draft. 

MBA fact of the day

"[M]anagers with MBAs have significantly higher return on assets effects." 

Excellent article on the discussion on the sources of productivity.

Abstract:

Economists have shown that large and persistent differences in productivity levels across businesses are ubiquitous. This finding has shaped research agendas in a number of fields, including (but not limited to) macroeconomics, industrial organization, labor, and trade. This paper surveys and evaluates recent empirical work addressing the question of why businesses differ in their measured productivity levels. The causes are manifold, and differ depending on the particular setting. They include ele- ments sourced in production practices—and therefore over which producers have some direct control, at least in theory—as well as from producers’ external operating environments. After evaluating the current state of knowledge, I lay out what I see are the major questions that research in the area should address going forward. ( JEL D24, G31, L11, M10, O30, O47).

Feeling Unproductive?

From Science for All, some advice to gain productivity:

For a short period of time each day, perhaps as small as 5 minutes, Richard Branson does something that makes him special. And it is what makes him successful.

More here.