Effect of Mood and Workplace Productivity

We leverage unique data on call-center workers to explore the causal effect of mood on their productivity in the field. Mood is measured through an online “mood questionnaire” which the workers are encouraged to fill out daily. We find that better mood actually decreases our call-center workers’ productivity. This finding holds both at a correlational level and in two IV settings, where mood is instrumented for by weather or, alternatively, by whether the local professional sports team has played the day before. We interpret this finding through the lens of a model where, consistent with experimental evidence, good mood increases sociability. Thus improving workplace mood may make “work downtime” more appealing, at the expense of productivity. The effect of mood is more muted for the subset of call-center workers whose compensation depends on productivity (high-powered incentives). We rule out a number of threats to the exclusion restrictions. To our knowledge, this is the first evidence of a causal link between worker mood and productivity in the field.