| Topic: |
Money or Monitoring: Evidence on Improving Worker Effort |
| Time&Date: |
10:30 am -12:00 pm, June 11, 2025 (Wednesday) |
| Venue |
Room 202, Teaching Complex D Building |
| Speaker: |
Pof. Jing Cai
University of Maryland
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| Abstract: |
Higher compensation and increased monitoring are two common strategies for ad- dressing the moral hazard problem between firms and workers. In a field experiment with new hires at an automobile manufacturing firm in China, we randomly varied both signing bonuses and monitoring intensity. Both interventions increased worker output but through different channels: signing bonuses led to longer working hours without significant gains in performance, while enhanced monitoring improved performance as evaluated by managers. Additionally, bonuses reduced quit rates, whereas monitoring raised them. These results suggest that firms should carefully consider their primary objectives and weigh these trade-offs when designing optimal labor contracts. |
| Biography: |
Jing Cai is an Associate Professor at the University of Maryland. She received her PhD from the University of California at Berkeley in 2012. Her research areas are development economics and household finance. Her current research examines the growth of micro-enterprises and SMEs, impacts of tax incentives on firm behavior, and diffusion and impacts of financial innovations in developing countries. Dr. Cai is a Co-Chair of the firm sector of the Abdul Latif Jameel Poverty Action Lab (J-PAL), a Research Associate at the National Bureau of Economic Research (NBER), and a fellow of the Bureau for Research and Economic Analysis of Development (BREAD). She currently serves as an associate editor of the American Economic Journal: Applied Economics, the Journal of Development Economics, and the Economic Development and Cultural Change. |
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