The effect of peer earnings information on wage expectations

Last registered on November 13, 2020

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Pre-Trial

Trial Information

General Information

Title

The effect of peer earnings information on wage expectations

RCT ID

AEARCTR-0006732

Initial registration date

November 13, 2020

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

November 13, 2020, 8:33 AM EST

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

Locations

Country

Mozambique

Region

Maputo City, Maputo Province, Tete, Nampula, Cabo Delgado

Primary Investigator

Name

Sam Jones

Affiliation

Development Economics Research Group, Copenhagen University

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Other Primary Investigator(s)

PI Name

Ricardo Santos

PI Affiliation

UNU-WIDER

Contact Investigator

Additional Trial Information

Status

On going

Start date

2019-10-02

End date

2020-12-01

Keywords

Education, Labor

Additional Keywords

Wage expectations, Information, Updating, Reserve Wage, School-to-work transition, Job search

JEL code(s)

Secondary IDs

Abstract

How do secondary school graduates’ wage expectations react to different types of new information? In this study, we review the effect of information on the evolution of future earnings expectations. We use a randomised control trial which exposes individuals to different information treatments over the period, based on data collected from prior survey rounds. The RCT is conducted with a large sample of Mozambican secondary school leavers from technical and vocational education institutes who are part of an on-going tracer study as they transition from school to the labour market.

External Link(s)

Registration Citation

Citation

Jones, Sam and Ricardo Santos. 2020. "The effect of peer earnings information on wage expectations." AEA RCT Registry. November 13. https://doi.org/10.1257/rct.6732-1.0

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Experimental Details

Interventions

Intervention(s)

The experiment will focus on how individuals update their wage expectations in response to different types of information about the actual income distribution. Groups of students, who are part of an on-going phone survey which is tracking their progression from school to work, will be sent information on average earnings by SMS. There will be three different messages which are sent out:
1) A general message: summarises wage information from the entire sample of students
2) A school type specific message: summarises wage information from the sub-sample of participants that attended the same school type as the recipient (public/private)
3) A field-specific message: summarises wage information from the sub-sample of participants in the same study field as the participant.

The wage information shared will be the most recent results from the on-going tracer study of technical and vocational students across Mozambique. Note, the specific information contained in each SMS varied by survey round; and, in the second and third types of message, the information varied by individual according to the school type they had attended or their field of training. Mirroring variation in actual wages, this design provides for substantial variation in the underlying wage information received.

Intervention Start Date

2020-04-06

Intervention End Date

2020-09-22

Primary Outcomes

Primary Outcomes (end points)

We have three primary outcome variables: beliefs about current peers' earnings, current reservation wage, and future own-earning beliefs (expected wage at the end of 2020).

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Secondary Outcomes (explanation)

Experimental Design

Directly after the baseline survey, which was conducted in October 2019, individuals were randomly-allocated to one of five experimental arms (including the control). The four treatment arms are distinguished by the type of messages they would receive. Specifically:
• Group one (general): received the general (all-student) message in all relevant rounds;
• Group two (school-type): received the school-type-specific message in all relevant rounds;
• Group three (field): received the field-specific message in all relevant rounds; and
• Group four (mixed): received the general message in round two, the school-type specific message in rounds three and four, and the field-specific message in rounds five and six.

The full sample is being tracked as part of a broader tracer study, where, on a quarterly basis, the participants respond to a phone survey on their current employment situation. Through these phone surveys the outcome variables, as well as other valuable employment information, is tracked over time.

Experimental Design Details

Randomization Method

Randomisation conducted in STATA. Randomisation across the five experimental arms was stratified by study field and gender, with a
target of around 260 participants in the control group and 340 in each treatment arm.

Randomization Unit

Individual

Was the treatment clustered?

Experiment Characteristics

Sample size: planned number of clusters

1 control group (259 individuals), 4 treatment arms (each of approximately 340 individuals)

Sample size: planned number of observations

1,622 individuals

Sample size (or number of clusters) by treatment arms

Control group: 259 individuals
Treatment group 1: 337
Treatment group 2: 343
Treatment group 3: 342
Treatment group 4: 341
Total: 1,622

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

Given the size of the experimental sample and the allocation into treatment arms, using an assumption that natural log of the expected wage in the control group equals 9.4 with a standard deviation of 0.7 (calculated from the baseline survey), the minimum detectable effect (at the 10% significance level) is 0.12 considering all treatment groups (combined). Or, for the smallest treatment group alone, the minimum detectable effect is a 0.14 log points. The former is about a three quarters the effect size found in Jones and Santos (2020).

Supporting Documents and Materials