REDISTRIBUTION AND EFFORT II

Last registered on April 12, 2022

Pre-Trial

Trial Information

General Information

Title
REDISTRIBUTION AND EFFORT II
RCT ID
AEARCTR-0009198
Initial registration date
April 08, 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
April 12, 2022, 8:09 AM EDT

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

Locations

Region

Primary Investigator

Affiliation
National University of Singapore

Other Primary Investigator(s)

PI Affiliation
National University of Singapore

Additional Trial Information

Status
In development
Start date
2022-04-10
End date
2022-05-31
Secondary IDs
Prior work
This trial is based on or builds upon one or more 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, receive transfers, and invest in education that increases their payments. The two treatments result in the same net income for any distribution of gross income levels. The real-effort task is done in five periods. Before each, the subjects can undertake an educational investment. The choice is binary. If they choose 'yes', their reward increases for each subsequent period, however, they have less time available in that period to complete tasks. In that time, they can read materials that are related to how to improve their performance. The second hypothesis tests the claim of proponents of UBI that UBI increases investment in human capital.
External Link(s)

Registration Citation

Citation
Lim, Noah and Gyula Seres. 2022. "REDISTRIBUTION AND EFFORT II ." AEA RCT Registry. April 12. https://doi.org/10.1257/rct.9198-1.0
Sponsors & Partners

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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 which can be increased with investment in education.

At the beginning of each period, the subjects face a binary decision. If they undertake investment in education, with two consequences. First, it permanently increases their gross payment by 0.10 SGD. Second, in that period, they can spend 2 minutes with completing tasks. In the remaining two minutes, they can read a document which explains how to improve typing skills.

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 (NITI) treatment, all tax is born by subjects that earn above the mean income. In particular, the tax is equivalent to half 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 half 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 (UBII) treatment, all subjects pay 50\% 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
2022-04-10
Intervention End Date
2022-05-31

Primary Outcomes

Primary Outcomes (end points)
The number of finished tasks in a period by a subject (score).
The number of periods with investment.
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 follows 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
10 sessions.
Sample size: planned number of observations
150 subjects, 750 observations.
Sample size (or number of clusters) by treatment arms
75 subjects in UBII
75 subjects in NITI
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.
IRB

Institutional Review Boards (IRBs)

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

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials