Understanding the Impact of Offering Loans on Forced Labor

Last registered on November 03, 2022

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Pre-Trial

Trial Information

General Information

Title

Understanding the Impact of Offering Loans on Forced Labor

RCT ID

AEARCTR-0010185

Initial registration date

October 10, 2022

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published

October 17, 2022, 4:10 PM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated

November 03, 2022, 5:47 PM EDT

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country

India

Region

Delhi, Bangalore

Primary Investigator

Name

Manisha Shah

Affiliation

UCLA

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Anisha Sharma

PI Affiliation

Ashoka University

Contact Investigator

PI Name

Beata Luczywek

PI Affiliation

UCSD

Contact Investigator

Additional Trial Information

Status

On going

Start date

2021-06-01

End date

2024-03-31

Keywords

Finance & Microfinance, Labor

Additional Keywords

Forced labor

JEL code(s)

J47, J81

Secondary IDs

Prior work

This trial does not extend or rely on any prior RCTs.

Abstract

Approximately 30% of workers in the Indian constructions sector report some form of forced labor risk (Global Fund to End Modern-day Slavery, 2021). Micro-contractors (MCs) are often the first point of contact for workers on a construction site and play a major role in determining their working conditions. They have direct influence over forced labor indicators, such as workers' freedom of movement at work, their debt to their employer, the payment of their wages, work hours, overtime, and others. However, MCs themselves also face a host of challenges in their daily operations, such as delayed payments from builders, limited access to low-cost working capital, inconsistent work orders, informal business management, and problems in sourcing and retaining workers. This study randomizes MCs into an experimental group (180 MCs) that is given access to low-cost loans, and a control group (70 MCs) without access. We measure the impact of access to loans on forced labor indicators in the workers under these MCs.

External Link(s)

Registration Citation

Citation

Luczywek, Beata, Manisha Shah and Anisha Sharma. 2022. "Understanding the Impact of Offering Loans on Forced Labor." AEA RCT Registry. November 03. https://doi.org/10.1257/rct.10185-2.0

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Experimental Details

Interventions

Intervention(s)

All MCs in the study (both in the control and treatment group) were provided with ethical worker training and given access to work orders and workers.

MCs in the treatment group were additionally offered access to low-cost loans. Access to low-cost loans is the treatment in this study.

Intervention Start Date

2021-11-01

Intervention End Date

2022-10-31

Primary Outcomes

Primary Outcomes (end points)

The primary outcomes are all measures of forced labor and include experience with threat from employer, threat to family from employer, lack of freedom of movement in non-work hours, working on rest days for fear of being fired, debt to employer, inability to leave the employer, working more hours than agreed upon, not paid the agreed upon wage, not paid on time, not paid for overtime, and not paid in full/wage withholding. We will also generate indices by grouping some of the measures into indexes.

Primary Outcomes (explanation)

These primary outcomes come straight from the International Labor Organization (ILO) and TIP (Trafficking in Persons) office definitions of forced labor. These are measures related to the use of fraud, coercion, and force in working situations that the US State Department and United Nations have flagged as important.

Secondary Outcomes

Secondary Outcomes (end points)

Take-up of loans

Secondary Outcomes (explanation)

The take-up of loans may be an important mechanism for how the intervention impacts forced labor.

Experimental Design

The research seeks to understand if offering MCs access to low cost loans reduces the prevalence of forced labor. All MCs in the study have access to the base program offered through Project Saksham. Project Saksham offers training, access to work orders, and access to workers. MCs in the treatment group additionally will be offered access to low cost working capital loans (offered by Gromor and Kois).

Experimental Design Details

Randomization Method

MCs are assigned to treatment or control groups stratified by region (Bangalore or Delhi). 90 MCs were randomized into treatment in Bangalore and 90 in Delhi. The rest are assigned to the control group.

Randomization Unit

Microcontractors (MCs)

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

250 Microcontractors

Sample size: planned number of observations

2500 workers

Sample size (or number of clusters) by treatment arms

180 MCs are in the treatment group and 70 MCs are in the control group. 1700 workers from treatment MCs and 800 workers from control MCs will be surveyed.

Minimum detectable effect size for main outcomes (accounting for sample design and clustering)

Minimum detectable effect size of 0.23 for binary outcomes, assuming an alpha-level of 0.05, power of 0.8, no covariates, cluster size of 10, and an intercluster correlation of 0.25.

Supporting Documents and Materials

IRB