Redistribution and effort

Last registered on March 05, 2024
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Pre-Trial

Trial Information

General Information

Title
Redistribution and effort
RCT ID
AEARCTR-0009158
Initial registration date
March 30, 2022

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
March 31, 2022, 3:32 PM EDT

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

Last updated
March 05, 2024, 9:27 PM EST

Last updated is the most recent time when changes to the trial's registration were published.

Locations

Country
Singapore
Region

Primary Investigator

Name
Gyula Seres
Affiliation
National University of Singapore
Contact Primary Investigator

Other Primary Investigator(s)

PI Name
Noah Lim
PI Affiliation
National University of Singapore

Additional Trial Information

Status
Completed
Start date
2022-03-31
End date
2023-12-31
Keywords
Behavior, Firms & Productivity, Labor
Additional Keywords
microeconomics, labor, productivity, redistribution, tax
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
This study tests whether the effects of redistribution on effort depend on how redistribution is framed. There are redistribution schemes that provide identical incentives in the sense that they result in the same disposable or net income for an agent with any given gross income. Yet, the idea has been proposed that framing affects incentives. In particular, universal basic income (UBI) is theorized to result in lower labor supply as the transfer is presented as unconditional in comparison to an equivalent negative income tax (NIT). Using a between-subject design, this RCT tests this hypothesis using a repeated real-effort experiment in which subjects receive payment for their performance, pay taxes and receive transfers. The two treatments result in the same net income for any distribution of gross income levels.
External Link(s)

Registration Citation

Citation
Lim, Noah and Gyula Seres. 2024. "Redistribution and effort." AEA RCT Registry. March 05. https://doi.org/10.1257/rct.9158-1.2
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Experimental Details

Interventions

Intervention(s)
This is a laboratory experiment employing a between-subject design. In each session with ten participants, subjects are randomly allocated into two groups of five using the experimental software zTree. This matching remains fixed throughout the experiment. They play a real-effort game five times. In each game, they have 4 minutes to complete tasks and those with higher performance receive higher rewards. The real-effort task is to type a randomly generated block of 20 characters backward into a text box. The blocks of characters were randomly drawn with replacement from a pool of 500 pre-generated blocks. After submitting the text, participants receive feedback and a new block of characters. They may complete as many tasks as they wished. At the end of the period, participants learned the number of correctly typed blocks. Each completed task is rewarded with 0.30 SGD gross payment.

In the control group (BM), there is no tax and no transfer. Participants always receive the full flat-rate payment for each completed task. The repeated game is played in two conditions that are identical in the distribution of final payoffs but different in how redistribution is framed. In the negative income tax (NIT) treatment, all tax is born by subjects that earn above the mean income. In particular, the tax is equivalent to 30% or 50% (depending on the treatment) of the difference between the gross income of the subject and the average gross income. Those below average receive a negative tax: they don't pay tax, only receive it. The transfer is equal to 30% or 50% (depending on the treatment) of the difference between their income and the average. By design, the sum of taxes equals the sum of transfers.

In the universal basic income (UBI) treatment, all subjects pay 30% or 50% (depending on the treatment) of their gross income as tax. Then, they receive an unconditional payment after each round that is an equal share of all tax revenues. The list of net incomes is identical to that of the NIT treatment for any gross income levels in the group.

Intervention Start Date
2022-03-31
Intervention End Date
2023-12-31

Primary Outcomes

Primary Outcomes (end points)
The number of finished tasks in a period by a subject (score).
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
This part is identical to the "Intervention (Public)" section above.
Experimental Design Details
Randomization Method
The study follow a between-subject design. Each session is run with 10 or 15 subjects in groups of five. Subjects self-enroll into sessions.
Randomization Unit
The unit of randomization is the experimental session.
Was the treatment clustered?
Yes

Experiment Characteristics

Sample size: planned number of clusters
30 sessions.
Sample size: planned number of observations
305 subjects, 1525 observations.
Sample size (or number of clusters) by treatment arms
75 subjects in UBI 50% tax
75 subjects in NIT 50% tax
55 subjects in BM
50 subjects in NIT 30% tax
50 subjects in UBI 30% tax
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
For the main hypothesis: Effect size 1, standard deviation 2, alpha=0.05, beta=0.8. The minimum is n=150.
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
NUS-IRB
IRB Approval Date
2022-03-05
IRB Approval Number
NUS-IRB-2022-99
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
Yes
Intervention Completion Date
May 25, 2022, 12:00 +00:00
Data Collection Complete
Yes
Data Collection Completion Date
May 25, 2022, 12:00 +00:00
Final Sample Size: Number of Clusters (Unit of Randomization)
205 subjects.
Was attrition correlated with treatment status?
No
Final Sample Size: Total Number of Observations
1025 rounds of real-effort tasks.
Final Sample Size (or Number of Clusters) by Treatment Arms
75 subjects in UBI, 75 subjects in NIT, 55 subjects in the benchmark treatments.
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials