Misperceptions of Career Incentives and Turnover: Evidence from Ethiopian Manufacturing Workers

Last registered on May 10, 2021

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Pre-Trial

Trial Information

General Information

Title

Career Incentives and Turnover: Evidence from Ethiopian Manufacturing Workers

RCT ID

AEARCTR-0006998

Initial registration date

May 09, 2021

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

May 10, 2021, 11:40 AM EDT

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

Locations

Country

Ethiopia

Region

Primary Investigator

Name

David Wu

Affiliation

UC Berkeley

Contact Primary Investigator

Other Primary Investigator(s)

PI Name

Maximiliano Lauletta

PI Affiliation

UC Berkeley

Contact Investigator

Additional Trial Information

Status

In development

Start date

2021-05-10

End date

2022-04-30

Keywords

Behavior, Firms & Productivity, Labor

Additional Keywords

JEL code(s)

Secondary IDs

Abstract

High turnover rates are a common issue in manufacturing firms in developing countries. In one of the main industrial parks in Ethiopia, the government has speculated that misperceptions regarding job characteristics among new hires contribute to high turnover rates. We propose to implement a new information treatment, with particular focus on long-run promotion incentives, and analyze the effect on belief update and turnover decisions. We will sample 2,000 new female young workers before they start working, and randomly provide information on entry-level operators, medium position, and high position. We plan to follow up workers within 1 week and after 6 months to measure their update in perceptions of salary and promotion within the industrial park and outside, whether workers have already left the industrial park, welfare outcomes, productivity, and skills.

External Link(s)

Registration Citation

Citation

Lauletta, Maximiliano and David Wu. 2021. "Career Incentives and Turnover: Evidence from Ethiopian Manufacturing Workers." AEA RCT Registry. May 10. https://doi.org/10.1257/rct.6998-1.0

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Experimental Details

Interventions

Intervention(s)

Intervention Start Date

2021-05-10

Intervention End Date

2021-08-31

Primary Outcomes

Primary Outcomes (end points)

Updated perceptions of job characteristics of the industrial park, workers' turnover, workers' productivity

Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)

Workers' welfare outcomes (income, consumption, health), plans in the future (education, marriage, migration), skills (general and specific), work attitude

Secondary Outcomes (explanation)

Experimental Design

We will implement a cross-randomized experiment on 2000 female young workers. For the first treatment arm (entry-level operator), we will provide information of salary as an entry-level operator. For the second treatment arm (promotion), we will provide salary and promotion likelihood of a higher position after 6 months. Within the second treatment arm, for half of the workers, we will provide information of the medium-level position; for another half, we will provide information of the high-level position.

Experimental Design Details

We first obtain the benchmark information from a current worker survey by Ethiopian Investment Commission. We then implement a cross-randomization of the following two major treatment arms.

Treatment 1 (T1): We provide workers with salary of entry-level operators in the first month, average salary of entry-level operators after 6 months, and likelihood of being assigned as an entry-level operator at the beginning.

Treatment 2 (T2): We provide workers with salary and promotion likelihood after 6 months, to the medium-level position (T2(a)) or to the high-level position (T2(b)).
1) T2(a): We provide workers with salary in the medium-level position, salary premium compared to entry-level operators, and likelihood of being in the medium-level position after 6 months and before 2 years
2) T2(b): We provide workers with salary in the high-level position, salary premium compared to entry-level operators, and likelihood of being in the high-level position after 6 months and before 2 years

Randomization Method

Randomization done in office by a computer

Randomization Unit

Individual

Was the treatment clustered?

Yes

Experiment Characteristics

Sample size: planned number of clusters

22 firms and 60 days of hiring

Sample size: planned number of observations

2,000

Sample size (or number of clusters) by treatment arms

500 control, 500 only provided with entry-level operator information, 500 only provided with promotion information (250 with medium-level position, 250 with high-level position), 500 both treatment (250 with medium-level position, 250 with high-level position)

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

Supporting Documents and Materials

IRB

Institutional Review Boards (IRBs)

IRB Name

The Committee for Protection of Human Subjects

IRB Approval Date

2021-05-04

IRB Approval Number

2020-04-13164

Analysis Plan

Analysis Plan Documents

Post-Trial

Post Trial Information

Study Withdrawal