Planning for Which Future? Understanding Micro-Entrepreneurs’ Expectations - Follow-Up

Last registered on July 01, 2024

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Pre-Trial

Trial Information

General Information

Title

Planning for Which Future? Understanding Micro-Entrepreneurs’ Expectations - Follow-Up

RCT ID

AEARCTR-0013917

Initial registration date

July 01, 2024

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

July 01, 2024, 1:16 PM EDT

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

Locations

Country

Tanzania, United Republic of

Region

Dar es Salaam

Primary Investigator

Name

Adrien Dautheville

Affiliation

Norwegian School of Economics

Contact Primary Investigator

Other Primary Investigator(s)

Additional Trial Information

Status

On going

Start date

2024-03-08

End date

2025-08-31

Keywords

Behavior, Firms & Productivity, Lab

Additional Keywords

Beliefs, Job Search

JEL code(s)

C93;D03;D21;D83;D84;J64;O17;O12

Secondary IDs

Prior work

This trial is based on or builds upon one or more prior RCTs.

Abstract

This project will investigate the dynamics of micro-entrepreneurs' expectations and business decisions. Like many other Sub-Saharan countries, the Tanzanian job market is very constrained, with few salaried jobs available. This is not improving: the youth's transition into formal salaried employment remains stagnant, mirroring the employment patterns of previous generations. At the same time, education access has developed widely. The young generation today can see that they have more education than their parent’s generation, while their exposure and knowledge of the job market are limited.

In this context, young workers forced into self-employment might both aspire and expect to transition to a stable paid job. Such expectations are likely to divert resources and efforts from business development toward job search.

The first goal of this project is to identify and measure the potential over-optimism of micro-entrepreneurs about their likelihood of transitioning into a salaried position. Then, using a lab-in-the-field information treatment, I will causally estimate the effect of accurate information on beliefs updating, business investments and job search, business outcomes and job finding.

External Link(s)

Registration Citation

Citation

Dautheville, Adrien. 2024. "Planning for Which Future? Understanding Micro-Entrepreneurs’ Expectations - Follow-Up." AEA RCT Registry. July 01. https://doi.org/10.1257/rct.13917-1.0

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Experimental Details

Interventions

Intervention(s)

Intervention (Hidden)

During the lab session, a randomized information treatment will be administered to half of the participants. This treatment, informed by the work of McKenzie & Paffhausen (2019) , will provide information on the likelihood, for similar micro-entrepreneurs in developing countries, to
transition to a paid job. This treatment aims to recalibrate micro-entrepreneurs’ beliefs about their likelihood of transitioning to salaried employment. It says:

“According to recent research, it turns out that after a year, approximately 1 out of 100 of micro-entrepreneurs like you will transition to a paid job. This is equivalent to 1 per cent chance. It means that a very small minority of entrepreneurs like you will transition to a stable paid job in the near

Intervention Start Date

2024-03-08

Intervention End Date

2024-03-22

Primary Outcomes

Primary Outcomes (end points)

- Business investments
- Business outcomes
- Job search investments

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

- Job search outcomes
- Respondents' labor market expectations

Secondary Outcomes (explanation)

Experimental Design

The study will survey Tanzanian micro-entrepreneurs, recruited on Markets in Dar es Salaam area. The sample will consist of 900 market traders, selected to be younger than 30 years old, and owner of their business. They will be sample over 20 to 30 market in Dar es Salaam.

Participants will be invited to REPOA’s headquarters to partake in a lab session where they will complete a survey. To tackle issues of transportation barriers and incentivize participation, we will provide a stipend and arrange transportation for the respondents, drawing on REPOAS’s successful precedents from similar studies.

Experimental Design Details

During the lab session, a randomized information treatment will be administered to half of the participants. This treatment, informed by the work of McKenzie & Paffhausen (2019), will provide information on the likelihood, for similar micro-entrepreneurs in developing countries, to transition to a paid job. This treatment aims to recalibrate micro-entrepreneurs’ beliefs about their own likelihood of transitioning to salaried employment.

4 months after this lab survey, a follow-up survey will be conducted on the phone.
Note, however, that the current Pre Analysis Plan focuses on the analysis of the baseline data. Another Pre Analysis plan, focusing on the follow-up data, will be written prior to the follow-up data collection, bu tafter analysis of the baseline data.

Randomization Method

randomization done by a computer directly by ODK collect app

Randomization Unit

inidividual

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

900

Sample size: planned number of observations

900

Sample size (or number of clusters) by treatment arms

450

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

Minimum detectable effect size for main outcomes (accounting for sample design and clustering) The sample size is chosen to ensure robust statistical power while balancing logistical feasibility. The proposed design allows the detection of an effect size of 0.2 standard deviations with a probability of 80%, using a standard 0.05 statistical significance. This allows for 12% (random) attrition between the baseline survey and the follow-up.

Supporting Documents and Materials

IRB