Self-Control and the Development of Work Arrangements

Abstract

A significant part of the development experience is the change in the way work is structured. To use a historical example, the Industrial Revolution involved workers moving from agriculture to manufacturing; from working on their own to working with others in factories; and from flexible work-hours to rigid work-days. How are we to understand these changes? Why did they occur? What impacts did they have on labor productivity and possibly growth? In answering questions such as these, economic theories draw on different assumptions about aggregate production, market failures, and innovation. Yet almost all rely on one of two determinants of labor productivity: human capital and incentives. Human capital theories (broadly construed) emphasize how work arrangements utilize the distribution of human capital and, in learning models, facilitate its development. Incentive theories (again broadly construed) emphasize how workplace arrangements align worker payoffs to minimize moral hazard. In this paper, we bring together and advance a growing literature on a third feature: worker self-control. Individuals may not be able to work as hard as they would like. Some workplace arrangements may make self-control problems more severe, while others may ameliorate them. Below, we describe evidence from a field experiment broadly supportive of the selfcontrol perspective. We then argue that many work arrangements can be understood differently through this perspective. Specifically, we