Layoffs and Productivity at a Bangladeshi Sweater Factory

Arbeitspapier

Conflicts between management and workers are common and can have significant impacts on productivity. Combining ethnographic, survey and administrative records from a large Bangladeshi sweater factory, we study how workers responded to management's decision to lay off about a quarter of the workers following a period of labor unrest. Our main finding is that the mass layoff resulted in a large and persistent reduction in the productivity of surviving workers. Moreover, it is specifically the firing of peers with whom workers likely had social connections - friends - that matters. Additional evidence on defect rates suggests a deliberate shading of performance by workers in order to punish the factory's management.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Paper ; No. 393

Classification and Topics

• Classification: Wirtschaft ; Labor-Management Relations, Trade Unions, and Collective Bargaining: General ; Personnel Economics: General ; Microeconomic Analyses of Economic Development
• Subject: layoffs ; productivity ; morale ; relational contracts

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Akerlof, Robert ; Ashraf, Anik ; Macchiavello, Rocco ; Rabbani, Atonu
• Event: Veröffentlichung
• (who): Ludwig-Maximilians-Universität München und Humboldt-Universität zu Berlin, Collaborative Research Center Transregio 190 - Rationality and Competition
• (where): München und Berlin
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/282085
• Last update: 10.03.2025, 11:43 AM CET