Research

This paper investigates the impact of job stability on the performance of workers, specifically women. In our context, job stability is defined as the attainment of a permanent contract protected by legal provisions. We exploit a unique panel dataset that contains daily sales output of 536 sales agents, 86% of whom are female, at a large retail firm in Indonesia. Each agent was initially employed on a temporary contract for 18 months; at the end of this period, about half the agents were offered permanent employment, while the rest continued on temporary contracts. We exploit this event and estimate a two-way fixed effects model. The results show that female agents who received a permanent contract increased their daily sales by 6\% in the next 30 days and by 6.7% in the next 180 days. Furthermore, an examination of the distributional effects of job stability by gender indicates no discernible differences in the behavioral responses of women and men. Our findings suggest that enhanced intrinsic motivation, rather than environmental factors or extrinsic incentives, is the primary driver of agents' behavioral responses. Furthermore, our study highlights several contextual factors that elucidate when female workers are most likely to respond positively to job stability. Results suggest that policies promoting job stability equally across genders can significantly improve worker productivity and overall firm performance while advancing Diversity, Equity, and Inclusion (DEI) objectives.

This paper develops and estimates a dynamic model of employment, schooling, and crime to study how the adult outcomes of adolescents from disadvantaged backgrounds are impacted by accumulating skills in the illegal sector, i.e., criminal capital. The estimation is based on 7 years of observations from a sample of juvenile offenders from Phoenix and Philadelphia, and shows that criminal capital accumulated during adolescence increases the likelihood of adult reoffending and permanently decreases educational attainment. Moreover, individual heterogeneity significantly explains enrollment, labor market attachment, and crime desistance in the long run. Using the estimates, I conduct counterfactual policy experiments to discuss the optimal allocation for long-run crime reduction of two policy instruments, school and wage subsidies. Simulations show that strategies to minimize crime and public expenditure should combine school subsidies before the age of majority and later wage subsidies—or, alternatively, school subsidies just before individuals turn 18.

When sellers can recommend services that are more expensive than necessary, how do trust signals from consumers affect their behavior? From a theoretical perspective, sending trust signals may benefit consumers by lowering sellers’ transaction cost expectations or by activating social preferences that promote honesty. However, signaling trust can backfire when consumers signal misinformation, believing they require a costlier service than necessary. In such cases, sellers may become more likely to overtreat consumers who appear willing to accept the expensive recommendation without objection. We empirically test these predictions using three field experiments. Our two main studies, set in the context of cellphone repairs, confirm that when consumers signal trust only, they receive lower price quotes. However, when consumers also send signals that they are misinformed, trust signals backfire significantly, exacerbating overtreatment by sellers. We show that these findings are robust to different variants of consumer trust and misinformation signals. A third field experiment, set in a different context of paid taxi rides, confirms the deleterious effect of trust signaling when consumers are misinformed.

We examine the relative effectiveness of two interventions promoting pro-social behavior by reducing littering. The first intervention, termed self-contribution focus (SC), aimed to increase awareness about the importance of individual contributions in keeping shared spaces clean. The second intervention, called peer-enforcement focus (PE), sought to raise the perceived costs of littering by highlighting the possibility of public censure from the community. To evaluate these interventions, we conducted a large-scale field experiment in Singapore. Our results show that both interventions effectively reduce overall littering, with only the PE intervention being effective among individuals who are more resistant to formal anti-littering sanctions. Two waves of door-to-door surveys in the intervention areas indicate that both SC and PE successfully raised awareness of anti-littering norms. Nonetheless, PE was more effective in influencing people's perceptions of being publicly scrutinized if caught littering.

We evaluate the returns to signaling occupation-specific skills using unique administrative data from a nationwide certification program in Colombia. The program certifies skills and issues three certificates: basic, intermediate, and advanced. We use regression discontinuity methods to compare workers' earnings around certificate-assignment thresholds. Signaling advanced occupation-specific skills yields significant returns: 9.7%, on average, within two years of certification. Instead, we find no effects from signaling basic or intermediate occupation-specific skills. Our analysis reveals that the primary mechanism behind the observed income effects associated with the advanced certificate is the ability to signal occupation-specific skills to potential employers.

This paper develops and estimates a dynamic model in which adolescents jointly decide to engage in crime, school, work, and consumption of illegal drugs. The model accounts for different dimensions of individual heterogeneity that affect the evolution of criminal engagement, human capital formation, and addiction. It also features multiple channels for studying the reciprocal effects of drug consumption on crime and human capital formation. Estimation is based on seven years of observations from a sample of juvenile offenders from Maricopa County (Phoenix) and Philadelphia County (Philadelphia). Estimates show that drug consumption increases illegal earnings, creating a feedback effect that reinforces criminal participation over time: crime rewards people with high addiction capital, facilitating future drug use, increasing illegal earnings, and making crime more appealing over time. We also find evidence of negative returns to repeated drug consumption in the legal sector. According to our estimates, the accumulation of addiction capital decreases the discount factor, making it less likely that individuals respond to incentives placed in the future.

Using the model parameters, we perform different simulations. Results indicate that limiting drug consumption at early ages reduces crime by 6.4% and the joint decision of schooling and crime by 8.4%. In addition, reducing criminal engagement before age 13 decreases addiction capital by 20% at age 25. We use the model estimates to explore the consequences of introducing policies implementing dynamic incentives to encourage ongoing education and disrupt the dependence cycle caused by prior engagement in criminal activities. Our findings indicate that utilizing dynamic incentives is significantly more effective in influencing long-term behavioral changes in adolescents.

Using data from a survey of juvenile offenders, I estimate the effects of incarceration, by facility type, over mental health and non-cognitive skills. I find evidence that effects vary by age. Younger offenders placed in adult facilities experienced the most significant decrease in mental health and non-cognitive skills. Also, my results suggest that such effects are long-lasting. I later discuss the implications of poor mental health over reoffending and high school graduation.

This paper describes and analyzes different forms of equilibrium within the market of standard form contracts where information is asymmetric and the agreement drafters decide which type of contract to offer considering that information is expensive for those who adhere. Under such conditions, equilibriums are met in which contracts exist with the minimum possible quality associated with a price. The results show that the market is unable to correct inefficient agreements and this produces a limitation to freedom of contract. This situation requires the implementation of controls over the contents of the standard form contracts in order to ameliorate such outcome. Finally, there is an experimental analysis of the fundamental theoretic results.