Work in progress

Light Touch Psychological Interventions with Economic Effects

[New draft 12/12/24!] Aspiring to a Better Future: Can a Simple Psychological Intervention Reduce Poverty? 

(with Rob Garlick, Mahreen Mahmud, Richard Sedlmayr, Johannes Haushofer, Stefan Dercon) 

Accepted: Review of Economic Studies. 

Do higher aspirations for the future motivate people living in poverty to make long-term investments? Do their aspirations increase when economic conditions improve? To answer these questions, we run a 415-village field experiment with 8,300 women living in poverty in rural Kenya. We design an 80-minute workshop to help people set higher aspirations and plan to achieve them. We cross-randomise this with large unconditional cash transfers. The work- shop substantially raises aspirations, labour supply, investment, revenue, and living standards 17 months later, relative to a placebo workshop. Increases in aspirations are the most likely mechanism to explain the economic effects. Cash transfers also raise aspirations, which might help to explain why transfers increase labour supply and investment. We conclude that aspirations respond to both economic and psychological interventions, contribute to investment decisions and living standards, and are important considerations for development policy.

• • • Pre-analysis plan. Evaluation summary on JPAL webpage

    • Video materials  

[New draft 25/06/25!] The Future in Mind: Short and Long Run Impact of an Aspirations Intervention in Rural Ethiopia 

(with Tanguy Bernard, Stefan Dercon, Giulio Schinaia and Alemayehu Seyoum Taffesse)

Revision requested: Quarterly Journal of Economics. Resubmitted.

Aspirations may condition the future-oriented choices of individuals and thus may play a role in the persistence of poverty or the effort to break out of it. We run a randomised controlled trial in remote, rural Ethiopia to explore this and evaluate an intervention which aims to change how poor people perceive their future opportunities, alter their aspirations and, through that, modify their investment decisions. A treatment group was shown video documentaries featuring individuals from similar communities who escaped poverty through their own efforts and serve as relatable role models. Five years after the screening took place, the treated households had increased future-oriented investments in agriculture, children’s education and assets. The results can be explained by an increase in aspirations in terms of lifetime goals. Overall, this research uniquely provides evidence that a light-touch behavioural intervention can have persistent economic impacts on a poor population.

• • • Pre-analysis plan. Documentaries and one of the placebo videos. JPAL research summary

    • Funding from the iiG. Run by IFPRI/EDRI's Ethiopia Strategy Support Programme

Cash Transfers and Role Models: Impacts on Women’s Empowerment in Rural Kenya 

(with Mahreen Mahmud and Emma Riley)

Submitted

Cash and asset transfer programs are widely used to improve household economic outcomes, but their impact on women’s empowerment is mixed. In a four-arm field experiment with 3,000 rural Kenyan women, we examine the effects of augmenting unconditional lump-sum cash transfers with a workshop designed to raise women’s  aspirations through role model exposure and facilitated planning. We find that combining the cash transfer and workshop increases women’s share of household resources and reduces intimate partner violence compared to the cash transfer alone. Our study highlights potential gains for women from combining poverty reduction strategies with psychological empowerment interventions.

• • • Pre-analysis plan

    • Video materials  

Search and Matching Frictions

[New draft 26/12/24!] Jobseekers’ Beliefs about Comparative Advantage and (Mis)Directed Search 

(with Rob Garlick,  Lukas Hensel and Andrea Kiss)

Revise and Resubmit, American Economic Journal: Applied Economics

Worker sorting into tasks and occupations has long been recognized as an important feature of labor markets. But this sorting may be inefficient if jobseekers have imperfect information about their skills and therefore apply to jobs that poorly match their skills. To test this idea, we study two field experiments that give young South African jobseekers information on their results from standardized assessments of job-relevant skills. Information redirects jobseekers’ search toward jobs that value skills where they score relatively highly, without raising their search effort. Information also substantially raises earnings, consistent with inefficient sorting due to imperfect information.

• • • Pre-analysis plan.

    • Funding from the World Bank Jobs Trust Fund, PEDL, NSF, and the Accelerating Adolescent Achievement Hub (UKRI GCRF). Run by the JPAL Africa office

[New draft 21/03/25!] Flexibility versus Performance: The Determinants of Labor Contracts in Nairobi, Kenya 

(with Inbar Amit, Alison Andrew, Nathan Barker, Rob Garlick, Carole Nekesa)

Employment in developing countries is often short and disrupted, generating costly search and limiting the potential for workers to accumulate firm-specific human capital. We study the incentives guiding firms’ use of short-term relative to long-term contracts in Nairobi, Kenya, using novel survey data on firms’ hiring and contracting practices, and hypothetical vignettes measuring their beliefs and preferences. Our key finding is that the use of short-term labor is governed by a trade-off between managing demand variation versus minimizing adjustment costs and incentivizing worker performance. We first document that firms face considerable variation in demand for goods and services across time, much of which they pass on to workers through short-term contracts: higher demand variation is associated with a greater use of short-term labor. Second, we show that bringing on short-term workers involves adjustment costs: it takes time searching for, hiring, and on-boarding workers, potentially offsetting the gains from flexibility. We show both that median adjustment costs are low, making short-term contracts feasible for many hires, but that hires with greater adjustment costs are more likely to be on long-term contracts. Finally, we show that firms believe contract type incentivizes worker performance: the same worker is expected to perform better when hired on a long-term basis. We incorporate these features -- variation in demand, on-boarding costs, and incentives -- into a model of firm hiring, through which to interpret contract choice and turnover in low-income countries.

• • • Funding from the Accelerating Adolescent Achievement Hub (UKRI GCRF) and G²LM|LIC. Run by REMIT Kenya.

Occupational Segregation and Gender Gaps in Nairobi: Disentangling Supply from Demand and Preferences from Beliefs using Worker and Employer Surveys (with Inbar Amit, Alison Andrew, Nathan Barker, Rob Garlick, Carole Nekesa)

In field

We examine four interlinked questions related to occupational segregation and wage inequality by gender in Nairobi, Kenya: (how) do employers treat women and men differently in the hiring process? (How) do gendered differences in preferences over job attributes and beliefs about the labour market shape differences in women’s and men’s employment choices and search strategies? How does providing accurate information to workers about the attributes employers value and their recruitment strategies affect men’s and women’s search strategies? And finally, what is the role of each of these factors in explaining occupational segregation by gender?  We will first measure firms’ preferences and beliefs about jobseekers’ responses to offers, by having firms rate hypothetical CVs that vary over attributes, including gender and parenthood. We will then survey young female and male jobseekers, and measure their preferences over job attributes and beliefs about job search by combining belief- and choice-based instruments.  Next, we will use results from the firm-side survey to experimentally vary the information sets of jobseekers about the attributes firms in different sectors value, and the methods they use to recruit. From there, we will survey treated and untreated individuals with a high-frequency phone survey about their job search and work behaviour. Finally, we will use these data to structurally estimate a model of job search and hiring, which we use to quantify the relative importance of search and hiring in gender gaps in wages and employment by occupation. 

• • • Funding from the Accelerating Adolescent Achievement Hub (UKRI GCRF) and G²LM|LIC. Run by REMIT Kenya.

Economic Effects of Mental Health Interventions

[New draft 13/12/24!] The Effects of Mental Health Conditions on Labor Market Outcomes in Low and Middle-Income Countries 

(with Crick Lund, Marc Witte, John Walker, Thandi Davies, Johannes Haushofer, Sarah Murray, Judy Bass, Laura Murray, Wietse Tol, Vikram Patel)

Studies of how mental health treatments affect labor market outcomes in low- and middle-income countries have produced conflicting findings. We conduct the first systematic review and meta-analysis of all such evaluations. We find psychotherapy for common mental health conditions, like depression, significantly improves work capacity. Point estimates suggest even larger effects for treating severe mental illness, but effects are marginally significant. We document substantial heterogeneity. At study level, effects decay over time and are smaller among perinatal women and in countries with low female labor force participation. We harmonize microdata from six studies of psychotherapy for depression to examine individual heterogeneity, finding larger effects for more educated people but little heterogeneity by age. We also quantify the work capacity burden of depression: reducing depression symptoms by the same amount as the average treatment improves work capacity by 1.68 days per month (26%). Treating mental health conditions has important economic benefits.

• • • PROSPERO review protocol

    • Funded by an anonymous donor 

Digital Delivery of Behavioural Activation to Overcome Depression and Facilitate Social and Economic Transitions of Adolescents in LMICs (DoBAt)

Intervention being piloted 

Depression is the leading cause of disability worldwide, and it is particularly problematic among adolescents given the risk for greater depression chronicity across the lifespan. Untreated depression exerts a huge economic toll as it impairs cognitive functioning, interpersonal relationships, interferes with schooling and disrupts work and productivity. These impairments have a greater impact on adolescents in low- and middle-income countries due to the additional adversities they face and the lack of available, effective treatments.

This three year project will use smartphones to deliver a digital intervention for adolescents, supported by local lay counsellors, to reduce depression and facilitate successful transitions to adulthood. We will adapt a tailored psychological therapy, Behavioural Activation (BA), among adolescents (15 to 19 years old) living in rural South Africa and Uganda. We will test the effectiveness of delivery of BA for reducing depression (primary outcome), and possible mechanisms, principally executive function and social cognition. As secondary outcomes, we will assess risk-taking behaviours and a range of human capital outcomes. Further, the proposed work will produce relevant measures of executive functions and social cognition through language translation and cultural adaptation and evaluate their reliability and validity in a rural context.

The team comprises a multidisciplinary group of psychologists, psychiatrists, neuroscientists and economists from South Africa (University of the Witwatersrand), Uganda (BRAC),  as well as from the UK (University of Oxford, University of Exeter, University College London) and the USA (University of California, Los Angeles, UCLA).

• • • Funding from the Medical Research Council and an anonymous donor

Understanding Mental Health in the Workplace

(with Ulrike Malmendier and Matthew Ridley)

• Funding from the Accelerating Adolescent Achievement Hub (UKRI GCRF). Run by the Busara Centre for Behavioural Economics

Economic and Political Effects of Unconditional Cash Transfers

Cash Transfers and Community Participation in Public Affairs:  A Village-Level Randomized Controlled Trial in Kenya (with Michael Walker) 

We provide causal evidence on how a large NGO-run cash transfer programme affects household civic and political participation and household requests for resources from local politicians. We randomly allocated the roll-out of GiveDirectly’s unconditional cash transfer programme, which provides transfers to poor households meeting a basic means test in treatment villages, across over 1,000 villages in Western Kenya. We collect survey data from over 10,800 households (both those poor enough to be eligible to receive the transfer and ineligible households) and 1,200 local leaders during the period after the 2017 election. Receiving a cash transfer does not affect household's voter turnout, vote choice, or favourability ratings of candidates. Voters (correctly) do not attribute the programme to local leaders. We find cash recipient households shift out of lower-level, "subsistence'" political engagement to higher-value group engagement. Namely, recipient households decrease private exchanges of patronage with politicians by attending fewer rallies (for which they receive small payments), making fewer requests for private support, and receiving fewer offers to sell votes. Recipient households join more community groups, and increase their contributions to group fundraisers; groups in cash villages make more requests to local leaders and receive more funding from outside sources. These group fundraisers raise significantly more than private requests. However, ineligible households in cash villages make more low-level exchanges. We find no changes in processes to allocate public goods funding. Results suggest aid programmes have few effects on electoral outcomes in this context, neither altering vote choices nor reducing the overall presence of clientelist relationships. They also suggest poor people’s involvement in local processes may be limited by the time and monetary cost of participation, as there is a strong participation gradient by wealth for households in control villages. As well as reducing poverty, transfer programs may enable increased participation in such processes.

• • • Pre-analysis plan. Evaluation summary on JPAL webpage

    • This paper is from one large village-level randomized controlled trial in rural Kenya. The trial was conducted in collaboration with GiveDirectly, an NGO which uses mobile payments technology to send donations to extremely poor families in the developing world. Core funding for the trial is from an anonymous donor, GiveWell, the Gates Foundation and the Accelerating Adolescent Achievement Hub (UKRI GCRF). The survey fieldwork was run by Innovations for Poverty Action.

    • Additional funding from the Abdul Latif Jameel Poverty Action Lab Governance Initiative, the Gates Foundation, the Oxford Martin School, the University of Oxford Fell Fund

Voters' Beliefs and Voter Turnout

Everybody Loves a Winner: A Field Experiment Providing Information on Polls in South Africa (with Brynde Kreft)

I show voters process information from pre-election polls using crude heuristics: they are overly swayed by whether a party is just winning a poll, compared to just losing. I conducted a field experiment with 2,023 low-income registered black voters from Johannesburg in South Africa’s 2016 elections. I provided two treatment groups with information from two different IPSOS polls. The polls both predict a close election and provide statistically indistinguishable predictions about vote shares. In one, the challenger party is ahead by a tiny margin; in another, the incumbent party is barely ahead. The difference in effect of the two polls is the effect on voters of a party being the narrow leader in a poll, compared to being the narrow loser. Supporters of the party just ahead in the polls are 10 percentage points more likely than a placebo group to turn out to vote (using verified measures) and 12 percentage points more likely to vote for their party (in self-reported measures); there are no effects on voters who learn their party is just behind. Voters who learn a party is just winning rate the party more highly, are more likely to support the party, and believe the party will win a higher share of the vote, compared to if they learn that party is barely losing, although the information about party quality and likely vote in both polls is similar. These effects imply that how the media frames poll results may have large effects on electoral outcomes. 

• • • Pre-analysis plan

    • Funding from the Ford Foundation, Merton College, the University of Oxford Fell Fund. Run by the JPAL Africa office