I have always wondered why corporate offices require a dress code for employees, even when the employees never see the outside world. Tyler Cowen blogs about corporate dress and makes a couple of interesting points, but it doesn’t really address my particular curiosity. He’s inspired by a reader who points out not many people are as comfortable in business attire as they are in casual clothes. If a worker is most productive when they are most comfortable then why would you force them to wear a suit?
A common explanation of smart clothing is signaling to overcome adverse selection. People choose to bear the cost of wearing uncomfortable but smart clothes to show how dedicated they are to their job and to gaining a promotion. However, this seems like an argument against dress codes: if people can choose what to wear then it’s easier for the eager employees to signal their dedication to The Company through their choice of clothing. As Tyler mentions, it may even be worthwhile for companies to impose a maximum dress code in order to eliminate the signaling costs that allowing suits imposes upon employees.
Ultimately, I think the reason for dress codes is shrouded in the mists of corporate managerial lore, of which I know nothing. I can’t think of a good reason for it in standard micro theory, and since Tyler Cowen can’t either I’m in good company there. If anybody has a good explanation for this convention I’d love to hear it.