Building the Habit of Regular Labor Supply in the Informal Market

Many individuals in low-income settings work surprisingly few days. This is a cause of concern for two reasons. First, this directly translates into lower earnings – in itself a major policy concern. Second, when more people are working, the overall economy benefits due to increased demand and investment. The existing economics literature has traditionally viewed low employment levels as a result of difficulty in finding work. While this view is undoubtedly important, it has not been able to fully explain low levels of work. Using an RCT which incentivizes casual workers to arrive at the labor stand by 8am, Schofield’s project will explore whether building a habit of regular and timely labor supply can increase work and earnings. Understanding what gives rise to these patterns will have broad policy implications for understanding which policies may be leveraged to improve the livelihood of the poor and, ultimately, sustain economic growth.