March 25, 2014 | Contribution by
Juan Chaparro is a PhD student in the Department of Applied Economics at University of Minnesota.
Construction worker for the Panama Canal extension project, 2012.
Photo credit: Flickr @Gerardo Pesantez / World Bank Photo Collection (http://www.flickr.com/photos/worldbank/)
As Latin America looks for ways to boost its low productivity, a new study by Eduardo Lora (former Chief Economist, Inter-American Development Bank) and Juan Chaparro (PhD student, Department of Applied Economics, University of Minnesota) suggests that the answer might lie in creating a better job environment. Chaparro tells the JKP that first they developed a model to better understand the relationship between job conditions, effort, wages, and productivity. Then they tested predictions from the model with individual-level data from the Gallup World Poll for 18 Latin American countries. Chaparro says the results are quite encouraging — better job conditions, created through identity-enhancing human resource management practices, are conducive to higher labor income and productivity.