The effect of self-efficacy on agency and crowding-out theory and its implications on worker effort: An experimental approach

It is the widely accepted belief in the field of economics that wages are the foremost driver of effort in the labor setting. If employers want to elicit higher levels of output among their workers, wages are raised. In the past years, the realm of sociology has presented theories which contest the claim. Through methods of experimental economics, the authors brought the two conflicting fields together to come up with more accurate determinants of worker effort by taking into consideration both incentives and sociological factors. The study revolves around the principal-agent problem which arises when a person compensates another to perform tasks which are beneficial to the former and costly to the latter. After an extensive review of literature, the authors identified variables such as monitoring, management-employee relationships, and a person's confidence in his ability to do hard work as the crucial elements in the worker setting. In a classroom experiment involving real effort conducted on students of De La Salle University-Manila, the authors sought to determine the variables or combination of such that would maximize worker effort.