To test for the presence of labor supply externalities and multiple employment equilibria, we will randomly vary the intensity of job offers across redistributive networks – offering actual positions at a local cashew-nut processing factory.
If redistributive pressure is leading to multiple equilibria, we anticipate that saturating a network with positions will lead to greater take-up of our job opportunities (and greater labor supply on the intensive margin).
Other mechanisms may also contribute to greater take-up of joint offers (with similar multiple equilibria in labor supply). As an illustration, network complementarities in the return to leisure, or in commuting, may be relevant.
To alleviate redistributive pressures faced by a potential worker, providing job opportunities to network members is an option. Another is to provide direct cash payments to those network members, corresponding in size and frequency to the transfers they would have received from that potential worker – making those payments public to the latter so that they substitute for the pressures she faces.
While a random subset of networks will be treated with the first option, another will be treated with the second option. If redistributive pressures are indeed driving the observed labor complementarities, the effects should be similar in both cases.
* The design has been updated to include a second phase to the experiment. It is described in the document attached to this submission on March 16th, 2022.
* The design has been updated to include a third phase to the experiment. It is described in the document attached to this submission on July 21st, 2022.