31 research outputs found
Real effects of electronic wage payments: Bangladeshi factory workers
Electronic wage payments offer an alternative to traditional financial inclusion approaches for the un-banked. Addressing constraints to savings can allow wages and remittance flows to poor households to translate into greater asset accumulation and resilience to financial or consumption shock
Consistently estimating graph statistics using Aggregated Relational Data
Aggregated Relational Data, known as ARD, capture information about a social
network by asking about the number of connections between a person and a group
with a particular characteristic, rather than asking about connections between
each pair of individuals directly. Breza et al. (Forthcoming) and McCormick and
Zheng (2015) relate ARD questions, consisting of survey items of the form "How
many people with characteristic X do you know?" to parametric statistical
models for complete graphs. In this paper, we propose criteria for consistent
estimation of individual and graph level statistics from ARD data
Essays on strategic social interactions : evidence from microfinance and laboratory experiments in the field
Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 2012.Cataloged from PDF version of thesis.Includes bibliographical references (p. 129-133).This thesis investigates the role of strategic social interactions in household decision-making using empirical evidence from India. In the first chapter, I ask how the actions of peers influence an individual's own decision to repay her loan obligations. In the subsequent chapters, I employ experiments to unpack some of the complex social interactions at play in communities in India. In each chapter, the value of social relationships plays a key role in influencing behavior. Chapter 1 examines peer effects in the case of microfinance. Around the world, microfinance institutions (MFIs) have invested heavily in building social capital and generally boast stellar repayment rates. However, recent repayment crises have fueled speculation that peer effects might also reinforce default behavior. I estimate the causal effect of peer repayment on individuals' repayment decisions in the absence of joint liability following a district-level default in which 100% of borrowers temporarily defaulted on their loans and after which borrowers gradually decided whether to repay. Because the defaults occurred simultaneously, the timing of the shock induced variation in repayment incentives both at the individual and peer group levels. Individuals (or peer groups) near the end of their 50-week loan cycles were closest to receiving new loans and had the strongest incentives to repay; those who had recently received disbursements had the weakest. Using the variation in the peer group's incentives to instrument for peer repayment, I find that if a borrower's peers shift from full default to full repayment, she is 10-15pp more likely to repay. Last, I present a dynamic discrete choice model of the repayment decision to estimate the net benefit of the peer mechanism to the MFI. Repayers' positive influence on others (not non-repayers' negative influence) mainly drives the effect. Thus, peer effects actually improve repayment rates relative to a counterfactual without peer effects. The second chapter (co-authored with my classmates Arun Chandrasekhar and Horacio Larreguy) uses detailed network data to study the role social interactions may play in contract enforcement and in determining the scope of co-investment. We perform laboratory experiments in Indian villages with non-anonymous participants, where participants play basic two-party trust games with a sender and receiver. In some treatments, we introduce third-party monitors or punishers that may or may not be identifiable by the other two participants. We find that the social network interacts with the play of the game in economically meaningful ways. First, social proximity partially mitigates the investment problem. Second, very central punishers are efficiency enhancing. Third, elites benefit from higher partner transfers, but do not use their status to increase total surplus. Finally, we use our results to provide an assessment of institutional structures as a function of network shape. Typically, socially far judges encourage efficient behavior, while socially close judges are prone to collusion. The final chapter (co-authored with Arun Chandrasekhar) explores the diffusion of information about rival goods. We randomly invite households to come to a pre-specified, central location in 39 villages to participate in laboratory games. Because many households that were not directly invited turned up at our experiments, we study how the information about the opportunity to earn close to one day's wage diffuses through rural Indian communities. Furthermore, because some members of some of the villages had prior experience playing similar laboratory games, we ask how experience with a task affects information-spreading and -seeking behavior. Finally, we examine possible channels for strategic information diffusion. In our environment, participant slots for non-invited households are limited, making them rival goods. Additionally, participants could potentially receive larger payoffs from playing the laboratory games with their peers. Because of these two motivations, we examine how final participation patterns may reflect strategic behavior on the part of informed households.by Emily Louise Breza.Ph.D
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Scabs: The Social Suppression of Labor
Social norms have the potential to alter the functioning of economic markets. We test whether norms shape the aggregate labor supply curve by preventing workers from supplying labor at wage cuts—leading decentralized individuals to implicitly behave as a cartel to maintain wage floors in their local labor markets. We partner with 183 existing employers, who offer jobs to 502 workers in informal spot labor markets in India. Unemployed workers are privately willing to accept jobs below the prevailing wage, but rarely do so when this choice is observable to other workers. In contrast, social observability does not affect labor supply at the prevailing wage. Workers give up 49% of average weekly earnings to avoid being seen as breaking the social norm. In addition, workers pay to punish anonymous laborers who have accepted wage cuts—indicating that cartel behavior is reinforced through the threat of social sanctions. Punishment occurs for workers in one’s own labor market and for those in distant regions, suggesting the internalization of norms in moral terms. Finally, consistent with the idea that norms could have aggregate implications, measures of social cohesion correlate with downward wage rigidity and business cycle volatility across India