11-19-2024
Workers aren’t complaining about work stress for no real reason, say Daniels School of Business econ professors David Hummels and Chong Xiang.
The two researchers, along with Jakob Munch, Professor of Economics at the University of Copenhagen, show in their paper “No Pain, No Gain: Work Demand, Work Effort, and Worker Health,” that in the quarters immediately after a sharp increase in sales, workers begin to experience negative health effects they had not suffered previously. They used Danish administrative data that enabled them to consistently track workers and the companies they work for over time.
“We observe periods in which companies grow rapidly and what happens to the workers, the same set of workers, who were employed by that specific company,” says Professor of Economics Xiang.
Two graphs from their paper illustrate their findings.
In both graphs, the “event” refers to rapid company growth, i.e., a large increase in sales at a specific company. The event happens at zero on the X axis.
The X axis, “Event Time (Quarters)” refers to the number of quarters that has elapsed since the event, with a -1 being one quarter before the event and so on.
The Y axis shows the change in the probability of the workers using heart and stroke drugs relative to one quarter before the event.
Each dot in the graph is an estimate for the change in sickness probability. The line around the dot shows the 95% confidence interval, or the range of values in which the change in sickness probability falls 95% of the time.
Before the event, the dots are close to zero, meaning the sickness probability doesn’t change much over time. After the event, however, the sickness probability increases steadily.
“Starting at 11 quarters after the event, when the entire line is above zero, we are confident that the effect is really there,” Xiang says.
This similar graphic looks at another sickness: depression and the probability of workers taking antidepressants. We see, again, that after rapid company growth, the sickness probability increases significantly and then remains elevated.
Read more about Hummels, Xiang and Munch’s Review of Economics and Statistics paper.
