Study indicates worker productivity increases during times of recession

Posted at 9:51 PM, Sep 28, 2013
and last updated 2013-09-28 23:51:01-04

SALT LAKE CITY – It might seem like worker productivity would decrease during an economic recession, but a new study from researchers at the University of Utah suggests the opposite.

The study found that during a recession, worker output actually increases—and businesses are able to do more with less.

Christopher Stanton is an assistant professor of finance at the University of Utah's David Eccles School of Business, and he authored the study.

“I think that this is a very interesting result because it suggests that the conventional wisdom is wrong,” he said of the study’s findings.

Stanton said his research suggests that fear is a great motivator.

"What we found is actually that workers were all scared to lose their jobs, and the least productive people at the firm, or any firm, were increasing their effort most to try and become some of the most productive workers at the firm,” he said.

The data for the study was collected between 2007 and 2009, and productivity was measured among 23,000 employees in 10 different states.

"This conclusion comes from data that we collected from a large services company,” Stanton said. “They had workers in many states doing the exact same tasks, and, remarkably, they had individual-level productivity measures for each worker."

The study indicated that employees work harder to keep the job they have in areas where unemployment is high.

"I think that as long as the job market is bad, that we will continue to see workers really killing themselves at work and really producing as much as they possibly can—nose to the grindstone,” Stanton said.

The study was published by the National Bureau of Economic Research.