Selection and Incentive Effects of Financial and Career Incentives on Labor Productivity: Evidence from a Field Experiment in Malawi

Author(s):  
Hyuncheol Kim
2020 ◽  
Vol 102 (5) ◽  
pp. 839-851
Author(s):  
Hyuncheol Bryant Kim ◽  
Seonghoon Kim ◽  
Thomas T. Kim

We study how career and wage incentives affect labor productivity through self-selection and incentive effect channels using a two-stage field experiment in Malawi. First, recent secondary school graduates were hired with either career or wage incentives. After employment, half of the workers with career incentives randomly received wage incentives, and half of the workers with wage incentives randomly received career incentives. Career incentives attract higher-performing workers than wage incentives do, but they do not increase productivity conditional on selection. Wage incentives increase productivity for those recruited through career incentives. Observable characteristics are limited in explaining selection effects of entry-level workers.


2013 ◽  
Author(s):  
Josse Delfgaauw ◽  
Robert Dur ◽  
Arjan Non ◽  
Willem Verbeke

2014 ◽  
Vol 28 ◽  
pp. 1-13 ◽  
Author(s):  
Josse Delfgaauw ◽  
Robert Dur ◽  
Arjan Non ◽  
Willem Verbeke

2013 ◽  
Vol 13 (1) ◽  
pp. 73-106 ◽  
Author(s):  
A. Sinan Unur ◽  
Elizabeth Peters ◽  
Kent D. Messer ◽  
William D. Schulze

Abstract The standard altruism model within the family predicts that transfers will be inversely related to the recipient’s income. Thus, parents will implicitly insure children against bad luck. This insurance may cause children to take undesirable risks. Anticipating this moral hazard, parents may alter their transfers. Using an artefactual field experiment, we show that parents use transfers to compensate for differences between their teenage children when incomes are independent of children’s actions. However, when a potential incentive problem is introduced, parents generally move away from compensating transfers. In addition, we find that the teenage children are more likely to take unfair bets when their behavior is not detectable by their parents.


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