Economic Impacts of Policy Interventions on Household and Labor Market Dynamics
Paper Session
Friday, Jan. 3, 2025 12:30 PM - 2:15 PM (PST)
- Chair: Shyamal Chowdhury, University of Sydney
Paternalistic Discrimination
Abstract
We combine two field experiments in Bangladesh with a structural labor model to define and test for paternalistic discrimination, the differential treatment of two groups to protect one group—even against its will—from harmful or unpleasant situations. We observe real hiring and application decisions for a night-shift job that provides safe worker transport home at the end of the shift. In the first experiment, we vary employers’ perceptions of job costs to female workers by experimentally varying information about the transport but holding taste-based and statistical discrimination constant. Not informing employers about the transport decreases demand for female labor by 22%. Employers respond more to transportation information than to a cash payment to female workers that would allow them to purchase safe transport for themselves. This suggests that employers paternalistically prevent women from making their own choices. In the second experiment, not informing applicants about the transport reduces female labor supply by 15%. In structural simulations that combine the results of both experiments, eliminating paternalistic discrimination reduces the gender employment gap by 24% and increases female wages by 21%.School Attendance Information or Conditional Cash Transfer? Evidence from a Randomized Field Experiment in Rural Bangladesh
Abstract
Low school attendance remains an important challenge in low-income countries due to cash and information constraints. Using a randomized field experiment, we compare the effectiveness of conditional cash transfer (CCT) with framing variations (gain vs loss) against high-frequency attendance information in a unified setting. CCT increases secondary school attendance by 12.4 percentage points, of which two fifths is attributable to the information component. These treatments further improve girls’ academic aspirations and delay early marriage. Daily CCT set around 30% of child wage maximizes the contemporaneous attendance impact. Conversely, weekly attendance information via inexpensive mobile technology boosts attendance sustainably and cost-effectively.Labor Market Consequences of Public Sector Salary Surge
Abstract
How does an increase in public sector salary affect the labor market in settings where public sector jobs are allocated through merit-based exams? Harnessing a natural experiment in Bangladesh whereby the public sector salary doubled in 2015, we show a 14 percentage points increase in unemployment among college graduates due to the salary hike. We argue that this is due to postponing labor market participation in the private sector to prepare for highly competitive merit-based public exams, which became even more competitive after the salary surge. We find that the effect on unemployment is higher for recent and female college graduates. The effect of the salary increase on unemployment also persists in the long run: Four years after the salary increase, college graduates who were eligible to apply for government jobs during the policy change but now ineligible demonstrate a three-percentage-point rise in the probability of unemployment. More saliently, this group of college graduates is 6.8 per-centage points less likely to participate in the labor market, implying a large share of these college graduates become discouraged jobseekers. The related social costs are significant, as individuals in this age group of college graduates are less likely to be married and are more likely to live in financial difficulties.Discussant(s)
Akib Khan
,
Uppsala University
Prottoy Aman Akbar
,
Aalto University
Tanjim Hossain
,
University of Toronto
Shahida Pervin
,
Waseda University
JEL Classifications
- O1 - Economic Development
- J0 - General