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Expectations, Wage Hikes, and Worker Voice: Evidence from a Field Experiment

Last registered on October 28, 2019
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Pre-Trial

Trial Information

General Information

Title
Expectations, Wage Hikes, and Worker Voice: Evidence from a Field Experiment
RCT ID
AEARCTR-0004945
Initial registration date
October 25, 2019

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 28, 2019, 1:26 PM EDT

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

Locations

Country
India
Region
Karnataka

Primary Investigator

Name
Teresa Molina
Affiliation
University of Hawaii at Manoa
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Other Primary Investigator(s)

PI Name
Anant Nyshadham
PI Affiliation
University of Michigan
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PI Name
Achyuta Adhvaryu
PI Affiliation
University of Michigan
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Additional Trial Information

Status
Completed
Start date
2016-05-01
End date
2017-12-01
Keywords
Firms & Productivity, Labor
Additional Keywords
JEL code(s)
C93, J20, J30, M50
Secondary IDs
Abstract
Hirschman's (1970) seminal thesis that enabling worker ``voice'' prevents exit from the employment relationship has played a foundational role in labor economics. We conduct the first experimental test of this hypothesis in a real-world setting via a randomized controlled trial in Indian garment factories. Just after what proved to be a disappointing wage hike, workers were chosen at random to participate in an anonymous survey in which they were asked for feedback on job conditions, supervisor performance, and overall job satisfaction. We investigate how enabling voice in this manner affected turnover and absenteeism after the hike.
External Link(s)

Registration Citation

Citation
Adhvaryu, Achyuta , Teresa Molina and Anant Nyshadham. 2019. "Expectations, Wage Hikes, and Worker Voice: Evidence from a Field Experiment." AEA RCT Registry. October 28. https://doi.org/10.1257/rct.4945-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2016-06-20
Intervention End Date
2016-07-15

Primary Outcomes

Primary Outcomes (end points)
Worker retention, worker attendance
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Just before the 2016 minimum wage schedule was announced by the Karnataka State Government, we collected data on a random sample of workers regarding their current wages; expectations about changes due to the upcoming wage increment; and other opportunities available to them in the labor market. These data reveal that workers' expectations were substantially higher than the realized wage hike: workers expected a hike that was roughly three times the size of the realized increase. On average, workers expected to earn about 17 USD (16 percent of total salary) more (per month) than their realized post-increment monthly wages.

Directly following the wage hike, we randomized half of the surveyed sample to an intervention designed to enhance workers' voice. Workers in the treatment group were invited to take part in a survey asking for 1) feedback on satisfaction related to job, supervisor, wage, and workplace environment; and 2) opinions on various statements: whether mistakes are held against them, whether it is difficult to ask others for help, whether supervisors encourage learning, and whether they can trust their supervisor to advocate for them, listen to them, and help solve their problems.

The use of an employee satisfaction survey to reduce quitting is motivated by the work of Hirschman (1970) and many others, under the basic premise that individuals have two main options in unsatisfactory situations: "exit" the relationship or use their "voice." That is, if unsatisfied with their jobs, employees can quit without trying to improve their situation at work (exit), or they can stay, speak up, and try to remedy the situation (voice). The workers in our study context do not typically have many opportunities to voice concerns about their working conditions and may therefore have no option but to exit, which may in part explain the firm's high rate of turnover. A "voice" instrument like the survey we administered has the potential to reduce exit, both because it serves as a means of expressing workers' dissatisfaction or concerns (directly providing utility to workers), and because it may lead to actual constructive changes in the work environment.
Experimental Design Details
Randomization Method
Randomization conducted by computer program.
Randomization Unit
Individual worker
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
2,000 workers (in 12 factory units, though treatment was not assigned by factory unit)
Sample size: planned number of observations
2,000 workers
Sample size (or number of clusters) by treatment arms
1,000 treatment workers and 1,000 control workers
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
July 15, 2016, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
Final Sample Size: Number of Clusters (Unit of Randomization)
Was attrition correlated with treatment status?
Final Sample Size: Total Number of Observations
Final Sample Size (or Number of Clusters) by Treatment Arms
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials