Essays in behavioral economics and development

Abstract

This dissertation presents three independent chapters that study labor markets in low-income countries and charitable giving. In the first chapter, I investigate whether present bias correlates with savings and job search behavior in a population of low-skill workers in Ethiopia. I elicit a measure of present bias in a tightly-controlled experiment and match results to high-frequency survey data that I collect over a period of three months. Present bias is a significant predictor of job search effort, controlling for liquidity and a broad range of covariates. Present-biased workers spend 57 percent less time on job search per week. As a result of reduced search, present-biased workers generate fewer offers. I find no significant correlation between present bias and savings behavior. In the second chapter, co-authored with Egon Tripodi, we study incentivized voluntary contributions to charitable activities. We consider a setting where different incentives coexist and agents can choose to donate without receiving monetary compensation. In a laboratory experiment we show that a collection system where compensation can be turned down can improve the efficiency of collection. Image effects and incentive effects do not crowd each other out. A significant share of donors turn down compensation. In the third chapter, also co-authored with Egon Tripodi, we use a field experiment to study how social image concerns affect pledges to engage in a charitable activity. We work with blood banks and a municipality in Germany to offer sign-ups for human whole blood donations. Motivated by a simple signaling framework, we randomly vary the type of organization to donate to and the visibility of the pledge to donate. We find evidence for strong social image concerns when subjects are asked in public whether they would like to pledge a donation with a well-known charity.