Allocating labor across small firms: Experimental evidence on information constraints

Morgan Hardy; Seongyoon Kim; Jamie McCasland; Andreas Menzel; Marc Witte

doi:10.1016/j.jdeveco.2024.103345

Allocating labor across small firms: Experimental evidence on information constraints

Morgan Hardy
, Seongyoon Kim
, Jamie McCasland
, Andreas Menzel
, Marc Witte

Research output: Contribution to Journal › Article › Academic › peer-review

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Abstract

We document interest in labor reallocation among small firm owners in Ghana; 60% and 41%, respectively, self-report willingness to hire or work for the average local firm owner. Firm owners also exhibit high willingness-to-pay for information on a random subset of hiring firms and jobseeking firm owners during a Becker–Degroot–Marschak exercise. Conditionally random variation in access to this information generates immediate labor adjustments within and between firms, though rarely of firm owners themselves, and impacts firm closure 5-months post-intervention. Our findings suggest that labor market information of this kind is both valuable and actionable in our context.

Original language	English
Article number	103345
Pages (from-to)	1-9
Number of pages	9
Journal	Journal of Development Economics
Volume	171
Early online date	31 Jul 2024
DOIs	https://doi.org/10.1016/j.jdeveco.2024.103345
Publication status	Published - Oct 2024

Funding

We are grateful to Kristopher Chatlosh for outstanding research assistance. The fieldwork for this research was partially funded by and conducted as part of a class at New York University Accra by Data Pivot Ghana. We are grateful to the staff and students of New York University for their participation, and especially Charles Sefenu, owner of Data Pivot Ghana, and his excellent enumeration team for their assistance with fieldwork. We are also grateful to Steffen Altmann, Vittorio Bassi, Rachel Heath, Seema Jayachandran, Dean Karlan, Ben Roth, C\u00E9line Zipfel, and seminar participants at IZA, New York University Abu Dhabi, University of Washington, Northwestern University, Harvard Business School, University of Michigan, Ca\u2019 Foscari University, NovAfrica Conference for Economic Development, the Firms, Labor Markets, and Development Conference at EUI, the LMU Economics of Firms and Labor Workshop, and the SITES conference 2023 in Napoli for helpful comments and suggestions. We thank Tom Vogl and two anonymous referees (one of whom read the paper at multiple journals) for very helpful comments. We gratefully acknowledge financial support from the Jobs and Opportunities Initiative (JOI) at the Abdul Latif Jameel Poverty Action Lab (J-PAL), the Private Enterprise Development in Low-Income Countries (PEDL) Initiative, and the NYU Abu Dhabi Tamkeen Research Institute Award CG005. This RCT was registered as AEARCTR-0007428.

Funders	Funder number
Northwestern University
Harvard Business School, University of Michigan
Abdul Latif Jameel Poverty Action Lab
Jobs and Opportunities Initiative
LMU Economics of Firms and Labor Workshop
Private Enterprise Development in Low-Income Countries
University of Washington
New York University Abu Dhabi
New York University	CG005, AEARCTR-0007428

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10.1016/j.jdeveco.2024.103345

Allocating labor across small firms_Experimental evidence on information constraintsFinal published version, 586 KBLicence: Article 25fa Dutch Copyright Act

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Allocating labor across small firms: Experimental evidence on information constraints

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