Job Security, Gender, and Sales Performance: Evidence from a Retail Sales Context

This paper investigates the impact of job stability on the performance of workers, specifically women. In our context, job stability is defined as the attainment of a permanent contract protected by legal provisions. We exploit a unique panel data set that contains daily sales output of 536 sales agents, 86% of whom are female, at a large retail firm in Indonesia. Each agent was initially employed on a temporary contract for 18 months; at the end of this period, about half the agents were offered permanent employment, whereas the rest continued on temporary contracts. We exploit this event and estimate a two-way fixed effects model. The results show that female agents who received a permanent contract increased their daily sales by 6% in the next 30 days and by 6.7% in the next 180 days. Furthermore, an examination of the distributional effects of job stability by gender indicates no discernible differences in the behavioral responses of women and men. Our findings suggest that enhanced intrinsic motivation, rather than environmental factors or extrinsic incentives, is the primary driver of agents’ behavioral responses. Furthermore, our study highlights several contextual factors that elucidate when female workers are most likely to respond positively to job stability. Results suggest that policies promoting job stability equally across genders can significantly improve worker productivity and overall firm performance while advancing Diversity, Equity, and Inclusion (DEI) objectives.

History: K. Sudhir served as the senior editor for this article. This paper has been accepted for the Marketing Science Special Section on DEI.

Funding and Competing Interests: All authors certify that they have no affiliations with or involvement in any organization or entity with any financial interest or nonfinancial interest in the subject matter or materials discussed in this article. The authors have no funding to report.

Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mksc.2023.0233.