NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Incentives, Selection and Productivity in Labor Markets: Evidence from Rural Malawi

Raymond P. Guiteras, B. Kelsey Jack

NBER Working Paper No. 19825
Issued in January 2014
NBER Program(s):   DEV   LS

An observed positive relationship between compensation and productivity cannot distinguish between two channels: (1) an incentive effect and (2) worker selection. We use a simplified Becker-DeGroot-Marschak mechanism, which provides random variation in piece rates conditional on revealed reservation rates, to separately identify the two channels in the context of casual labor markets in rural Malawi. A higher piece rate increases output in our setting, but does not attract more productive workers. Among men, the average worker recruited at higher piece rates is actually less productive. Local labor market imperfections appear to undermine the worker sorting observed in well-functioning labor markets.

You may purchase this paper on-line in .pdf format from SSRN.com ($5) for electronic delivery.

Information about Free Papers

You should expect a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.

E-mail:

A data appendix is available at http://www.nber.org/data-appendix/w19825

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w19825

Users who downloaded this paper also downloaded these:
Fajgelbaum w19492 Labor Market Frictions, Firm Growth, and International Trade
Melitz and Redding w19810 Missing Gains from Trade?
Heckman, Humphries, Veramendi, and Urzua w19971 Education, Health and Wages
Jayaraman, Ray, and de Vericourt w19849 Productivity Response to a Contract Change
Mobarak and Rosenzweig w19811 Risk, Insurance and Wages in General Equilibrium
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us