Productivity Gains and Work Conditions in Coercive Labor Markets: Experimental Evidence from the Bangladesh Brick Sector
Productivity growth is central to theories of economic development and can improve worker welfare through higher wages or better conditions. While this may hold in competitive labor markets, it is unclear if productivity gains benefit workers in coercive labor markets, where force or threats shape employment. We examine this issue in the Bangladesh brick sector using a randomized trial that introduced a more efficient production method. Despite large productivity improvements, we find no reduction in (high) rates of labor trafficking or child labor. These findings suggest that productivity growth alone may be insufficient to improve work conditions in coercive settings.
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