Research

Primary Fields: Development Economics, Environmental Economics

Secondary Field: Labor Economics

WORKING PAPERS

This paper examines complementarities in labor supply:  to what extent does a person's desire to work at a firm depend on whether others in her social network also work at the firm? We conduct two field experiments in urban Côte d’Ivoire. In the first experiment, job seekers are 16pp more likely to accept a formal full-time factory job if their network members also receive a job offer, and 15pp more likely to stay in that job four months laterbut only if they will be employed in the same shift (rather than different shifts). These effects are driven by workers with long commute times, who can commute to work together. Consistent with this channel, in the firm’s administrative data, workers’ own attendance and turnover are predicted by the attendance and quits of co-commuting peers. In a second field experiment with a different firm, we again randomize whether a worker’s network members are offered a job, whether they would be co-located with the worker, and job location—inducing exogenous variation in commute time.  We replicate the finding of complementarities in labor supply, but only in the case of long assigned commute times. These findings indicate that the social composition of one’s peers can have large impacts on labor supply, and suggest that one important mechanism is commuting costswhich are especially high in developing country cities.  Our results provide a novel explanation for key features of urban labor markets, including firms' widespread use of referrals for hiring and persistent gaps in employment across social groups.

Human actions can alter the regional climate, particularly via land use. We analyze the Great Plains Shelterbelt, a large-scale forestation program in the 1930s across the US Midwest. This program led to a decades-long increase in precipitation and decrease in temperature. Changes extended to adjacent unforested land up to 200km away - enabling us to directly study climate adaptation. In downwind places facing improved growing conditions, farmers expanded corn acreage and switched to more water-intensive production. This paper highlights the endogeneity of the climate to land use changes, and the potential for tree planting to regionally mitigate climate change impacts.

"The Social Tax: Redistributive Pressure and Labor Supply" (with Eliana Carranza, Aletheia Donald, and Supreet Kaur), Revise and resubmit, Econometrica

[Coverage: Econimate, WB Development Impact, WB Policy Brief] [NBER Working Paper 30438, IZA Discussion Paper 15743]

In low-income communities, pressure to share income with others may disincentivize work, distorting labor supply. We document that across countries, social groups that undertake more interpersonal transfers work fewer hours. Using a field experiment, we enable piece-rate factory workers in Côte d’Ivoire to shield income using blocked savings accounts over 3-9 months. Workers may only deposit earnings increases, relative to baseline, mitigating income effects on labor supply. We vary whether the offered account is private or known to the worker’s network, altering the likelihood of transfer requests against saved income. When accounts are private, take-up is substantively higher (60% vs. 14%). Offering private accounts sharply increases labor supply—raising work attendance by 10% and earnings by 11%. Outgoing transfers do not decline, indicating no loss in redistribution. Our estimates imply a 9-14% social tax rate. The welfare benefits of informal redistribution may come at a cost, depressing labor supply and productivity.

We introduce a novel framework for inferring the private marginal abatement cost to comply with tightened environmental regulations before they are enacted. We apply our approach to the multiperiod structure of the US National Ambient Air Quality Standard (NAAQS) for ozone, which saw considerable changes in 1997. The revamped standard employs a three-year running average, designed to diminish the influence of unpredictable meteorological factors that could push ambient air quality beyond the acceptable range in a given year. By modulating emissions in the current year, anomalies from preceding years can be offset, ensuring the 3-year average stays below the designated threshold. Following the 1997 modification, we detect a pronounced negative counterresponse: Ozone disturbances caused by temperature fluctuations in earlier years are counteracted in the present year. This adjustment is facilitated by curbing NOx and VOC emissions from sources like industrial boilers and petroleum plants. The magnitude of the observed correlation suggests that firms don't deem it excessively burdensome to modify emissions. Lastly, we derive the Bellman equation from minimizing the anticipated environmental compliance cost, which strikes a balance between abatement cost and the repercussions of falling into non-attainment that were identified in previous studies. By simulating the counterresponse across various marginal abatement cost scenarios, we select the one that aligns the inferred counterresponse with the actual one observed in our dataset.

SELECTED WORK IN PROGRESS

[Slides available upon request]

Limited guidance exists for the optimal design of experiments testing for spillovers in networks of general structure. Most existing work has focused on the particular case of networks with disjoint clusters and is thus not applicable to broad classes of networks, including networks of individuals in dense urban areas, networks of workers within firms, or supply chain networks of firms. Further, available methods for inference on networks often suffer from low statistical power. This represents a significant barrier to applied work. In this project, we propose a novel, "split-graph", design to test for the spillover effects of interventions in networks. We discuss the properties of the design and compare them to popular alternatives. We also offer a method to select the parameters of the design that maximize the statistical power of the associated inference. We apply the proposed design to a large experiment, currently in the field, testing for spillovers of tax audits through firms’ networks in a lower-income country.

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Last updated: April 2024