“Does Identity Affect Labor Supply?” [Job market paper]

Does identity—one's concept of self—influence economic behavior in the labor market? I investigate this question in rural India, focusing on the effect of caste identity on labor supply. In a field experiment, casual laborers belonging to different castes choose whether to take up various real job offers. All offers involve working on a default manufacturing task and an additional task. The additional task changes across offers, is performed in private, and differs in its association with specific castes. Workers' average take-up rate of offers is 23 percentage points lower if offers involve working on tasks that are associated with castes other than their own. This gap increases to 47 pp if the castes associated with the relevant offers rank lower than workers' own in the caste hierarchy. Responses to job offers are invariant to whether or not workers' choices are publicized, suggesting that the role of identity itself—rather than social image—is paramount. Using a supplementary experiment, I show that 43% of workers refuse to spend ten minutes working on tasks associated with other castes, even when offered ten times their daily wage. This paper's findings indicate that identity may be an important constraint on labor supply, contributing to misallocation of talent in the economy.

Coverage: Marginal Revolution, World Bank Blogs, Livemint

“Does Financial Strain Lower Productivity?” with Supreet Kaur, Sendhil Mullainathan, and Frank Schilbach

This paper empirically tests for a direct causal impact of financial strain on worker productivity. We randomize the timing of income receipt among Indian workers who earn piece rates for manufacturing tasks: some workers receive their wages on earlier dates, altering when cash constraints are eased while holding overall wealth constant. Workers increase productivity by 5.3% on average in the days after cash receipt. The impacts are concentrated among poorer workers in the sample, who increase output by over 10%. This effect of cash on hand on productivity is not explained by mechanisms such as gift exchange, trust in the employer, or nutrition. We present positive evidence that productivity increases are mediated through lower attentional errors in production, indicating a role for improved cognition after cash receipt. Finally, directing workers’ attention to their finances via a salience intervention produced mixed results—consistent with concerns about priming highlighted in the literature. Taken together, our results indicate a direct relationship between financial constraints and worker productivity and suggest that psychological channels mediated through attention play a role in this relationship.

“Gender Norms in Marriage and Female Labor Productivity” [Pilot in progress]

This project investigates whether gender norms lead women to hold back their potential in the labor market. While the existing literature has shown that women tend to earn less than their husbands, there is limited direct evidence on whether women actively avoid earning more than their spouses and the determinants of such behavior. The experiment engages married couples working as casual laborers in a short-term manufacturing job that pays piece-rate on output. The experiment provides women an extra hour to work without this difference being salient, making it likely that they could earn more than their husbands. After husbands finish piece-rate production, women are randomized into one of three conditions in which 1) wife is informed of her husband’s production and expects both spouses to learn the couple’s individual production at the end of the day, 2) wife is informed of her husband’s production and expects that only she will learn the couple’s individual production, or 3) both spouses are only informed of their joint production. Pilot results show that women in the last two conditions achieve on average one hour’s worth of production more than that of their husbands, suggesting that women do not have intrinsic concerns about earning more than their husbands. However, this productivity gap disappears when women expect their husbands to also find out about individual production, suggesting that women care about husbands’ beliefs or reactions. The full study will focus on disentangling mechanisms and examining broader implications using observational data.

“Demand for Flexible Work and Contract Choice” with Nandita Krishnaswamy and Yogita Shamdasani [Pilot in progress]

The unskilled labor market in rural India is characterized by both high levels of unemployment and high rates of worker absenteeism. To explain the coexistence of these two features, we propose that workers have substantial demand for flexibility in work arrangements. We first build a model of a segmented labor market with two main sources of employment—regular employment with structured schedules and casual daily-wage employment with flexible schedules—to illustrate that worker demand for flexibility can drive both high absenteeism in the former and high unemployment in the latter. Next, we use an incentive-compatible choice experiment with unskilled workers to elicit preferences over pairs of contracts that offer varying levels of flexibility for a month-long employment opportunity. Using these elicitations and survey data, we aim to measure the following: 1) the share of workers who have demand for flexibility that exceeds what is permitted by structured schedules offered in the market; 2) the correlates of worker demand for flexibility including measures of poverty; and 3) worker valuation of flexibility in terms of foregone potential earnings. These measures would indicate how worker demand for flexibility affects labor supply decisions, both in terms of absence and selection into particular work arrangements. We discuss the potential implications of our findings for income inequality in an economy that is transitioning into more structured modes of production.