IZA World of Labor

Organization and hierarchies

  • How is new technology changing job design?


    Michael Gibbs, March 2017
  • Are overhead costs a good guide for charitable giving?

    Donors rely on overhead costs to evaluate charities, but that reliance creates disincentives for charities to hire skilled workers

    Jonathan Meer, January 2017
    Charity rating agencies often focus on overhead cost ratios in evaluating charities, and donors appear to be sensitive to these measures when deciding where to donate. Yet, there appears to be a tenuous connection between this widely-used metric and a charity’s effectiveness. There is evidence that a focus on overhead costs leads charities to underinvest in important functions, especially skilled workers. To evaluate policies that regulate overhead costs, it is necessary to examine whether donors care about overhead costs, whether they are good measures of charity effectiveness, and what effects a focus on overhead costs has on charities.
  • Inequality and informality in transition and emerging countries

    Higher inequality decreases capital accumulation and increases informality, which, in turn, raises the income of the poor

    Roberto Dell'Anno, December 2016
    Higher inequality reduces capital accumulation and increases the informal economy, which creates additional employment opportunities for low-skilled and deprived people. Despite this positive feedback, informality raises problems for public finances and biases official statistics, reducing the effectiveness of redistributive policies. Policymakers should consider the links between inequality and informality because badly designed informality-reducing policies may increase inequality. However, convincing empirical evidence is still lacking and is usually limited to correlations rather than causal effects.
  • Do social interactions in the workplace lead to productivity spillover among co-workers?

    Peer pressure can affect productivity and explain why workers’ wages and productivity depend on their co-workers’ productivity

    Thomas Cornelissen, November 2016
    Should one expect a worker’s productivity, and thus wage, to depend on the productivity of his/her co-workers in the same workplace, even if the workers carry out completely independent tasks and do not engage in team work? This may well be the case because social interaction among co-workers can lead to productivity spillover through knowledge spillover or peer pressure. The available empirical evidence suggests that, due to such peer effects, co-worker productivity positively affects a worker’s own productivity and wage, particularly in lower-skilled occupations.
  • High involvement management and employee well-being


    Petri Böckerman, July 2015
  • How should teams be formed and managed?

    How teams are chosen and how they are compensated can determine how successfully they solve problems and benefit the firm

    Hideo Owan, August 2014
    The keys to effective teamwork in firms are (1) carefully designed team-formation policies that take into account what level of diversity of skills, knowledge, and demographics is desirable and (2) balanced team-based incentives. Employers need to choose policies that maximize the gains from teamwork through task coordination, problem solving, peer monitoring, and peer learning. Unions and labor market regulations may facilitate or hinder firms’ attempts at introducing teams and team-based incentives.
  • Do responsible employers attract responsible employees?


    Karine Nyborg, May 2014