Institutional Affiliation: Columbia University
|Propping Up the Wage Floor: Collective Labor Supply without Unions|
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Social norms have the potential to alter the functioning of economic markets. We test whether norms shape the aggregate labor supply curve by leading decentralized individuals to maintain wage floors in their local labor markets. We partner with existing employers who create new jobs for workers in informal spot labor markets. Unemployed workers would like to find work, and prefer to do so even at wages below the prevailing wage rather than remain unemployed. However, they rarely do so when this choice is observable to other workers. In contrast, social observability does not affect labor supply at the prevailing wage. Consistent with the idea that norms could have aggregate implications, measures of social cohesion correlate with downward wage rigidity and business cycle volatility across...
|Voter Response to Peak and End Transfers: Evidence from a Conditional Cash Transfer Experiment|
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In a Honduran field experiment, sequences of cash transfers to poor households varied in amount of the largest (“peak”) and last (“end”) transfers. Larger peak-end transfers increased voter turnout and the incumbent party’s vote share in the 2013 presidential election, independently of cumulative transfers. A plausible explanation is that voters succumbed to a common cognitive bias by applying peak-end heuristics. Another is that voters deliberately used peak-end transfers to update beliefs about the incumbent party. In either case, the results provide experimental evidence on the classic non-experimental finding that voters are especially sensitive to recent economic activity.
Published: Sebastian Galiani & Nadya Hajj & Patrick J. McEwan & Pablo Ibarrarán & Nandita Krishnaswamy, 2019. "Voter Response to Peak and End Transfers: Evidence from a Conditional Cash Transfer Experiment," American Economic Journal: Economic Policy, vol 11(3), pages 232-260. citation courtesy of