Studies in Labor Economics, Organizational Economics, and Development

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Studies in Labor Economics, Organizational Economics, and Development

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Title: Studies in Labor Economics, Organizational Economics, and Development
Author: Atallah, Samura
Citation: Atallah, Samura. 2016. Studies in Labor Economics, Organizational Economics, and Development. Doctoral dissertation, Harvard University, Graduate School of Arts & Sciences.
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Abstract: The first chapter in this dissertation discusses the results of a field experiment that lasted three weeks at a firm in Saudi Arabia where we randomized an attention to variability or mindfulness training program. We conducted a baseline and end-line survey 3 months post training, collecting measures on non-cognitive skills, beliefs, affect, and employee performance and productivity. The training program was incentivized as managers’ reports on employees’ performance get reflected in future raises and bonus pay. We converted the measures to z-scores (unit standard deviation, mean zero) to standardize the scaling across measures. We found that mindfulness improved by 0.485 standard deviations in the treatment group. This effect is mediated by an increase in employees’ engagement. The extent to which locus of control is internal improved by 0.344 standard deviations, meaning that employees who took the training gave a greater weight to effort verses luck in determining their life outcomes. On the other hand, we found that work locus of control became more external by 0.646 standard deviations, and that employees perceived a greater degree of ethnic discrimination. On average, employees’ performance improved by about 0.5 standard deviations as measured by managers’ direct reports and punctuality. We explain the improvement in general locus of control but decrease in work locus of control with the gains in productivity and performance through a compensating story. Being more aware of variability has arguably led employees to perceive more discrimination in the environment, resulting in employees perceiving their work locus of control as more external. But employees improved their performance as a compensatory measure for perceived discrimination.

The second chapter discusses the results of two lab experiments where we measure the effects of a negative shock on wage under uncertainty on subsequent efforts decisions under certainty. We found that students in the negative shock treatment do not optimize their effort, decreasing their total payout. This is explained through a tax in beliefs on the relationship between effort and reward in life, and trust in life. Even though the lab experiment was local, the students generalize what they learnt to their life beliefs. Furthermore, we conduct a second experiment to test that it is the uncontrollability of the negative shock rather than the negative shock per se that caused this. While this is a lab experiment and it is likely that these effects do not last in the long term, these results can be put in perspective when one thinks about the uncontrollability of the shocks that the poor are exposed to in the long-term, and their effect on life beliefs and effort decisions.

The final chapter provides support to how the poor are more likely to experience learned helplessness and larger magnitude of learned helplessness. The effects of initial levels of capital, institutions, and differences in expected utility on learned helplessness is explored. We also provide evidence that once learned helplessness occurs, it is more likely that it will occur in the future providing evidence for poverty traps. We discuss the effects of noncognitive skills in decreasing the probability that learned helplessness will materialize, and in breaking the cycle.
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