Downsizing and the Survivor Syndrome - A Field Experiment

While layoffs are often necessary for growth in a dynamic economy, they are discussed controversially in the general public and in the media. A significant psychological literature suggests that there may be costs associated with a decrease in work morale and motivation of those who remain employed in the company (the so-called survivor syndrome). In this project, we use a field experiment to study the effect of layoffs on the performance of the remaining workers. The random assignment of layoffs allows us to identify the magnitude of the survivor syndrome. We complement the data by a laboratory experiment in which we measure behavioural variables such as the workers degree of reciprocity, and we link the data from workers résumés with their behaviour in the field experiment. The project will therefore generate a unique dataset that enables us to study the behavioural causes and consequences of the survivor syndrome.

Keywords:Field Experiment, Survivor Syndrome, Downsizing

Disciplines:Economic development, innovation, technological change and growth