The emergence of low-skill manufacturing sectors in developing countries has expanded labor market opportunities and generated economic benefits for women (Heath and Mobarak, 2015; Tanaka, 2017). However, given the poor conditions that characterize many low-skill manufacturing jobs, researchers have questioned whether these positions are in fact preferable to workers’ alternatives (Blattman and Dercon, 2018; Blattman, Dercon, and Franklin, 2019). Recent work by co-PIs Boudreau and Heath provided evidence consistent with a model in which information frictions about working conditions play a central role.
Building on this prior research and a pilot randomized controlled trial conducted by co-PI Boudreau, this project experimentally investigated the extent to which information and search frictions in Bangladesh’s labor market contributed to inefficient matching between workers and firms, and how these frictions interacted with gender. The study implemented a cluster randomized controlled trial that provided workers with information about job characteristics (wages and working conditions), job openings, or both. It then assessed impacts on workers’ beliefs about working conditions and wages in the garment sector, job search behavior, and employment outcomes. Given that women particularly value safe workplaces and are more likely to lack information about job openings and working conditions, the project examined whether policies that alleviate information frictions can reduce gender gaps in labor market outcomes and improve the working conditions faced by women without compromising their health, safety, or well-being.
The research team began by conducting a household survey of a residential sample of garment workers across neighborhoods in Savar, Gazipur, and Narayanganj—peri-urban areas surrounding Dhaka with high concentrations of garment factories and garment-sector employment. Following the baseline survey, individuals with less than two years of sector experience were deemed eligible for participation. To account for spillovers, treatment was assigned at the neighborhood level. Within neighborhoods, eligible individuals were stratified by gender, beliefs about their factory’s quality relative to nearby factories, and their factory’s actual quality relative to others, before random selection into treatment groups. Selected participants completed an extended survey capturing detailed work histories, information sources, and perceptions of alternative factories.
Information about working conditions and job openings was delivered through pamphlets that enumerators reviewed in detail with participants. Information on working conditions combined worker-reported data from the household survey with objective measures from buyer audits and government safety initiatives compiled by the research team. The project piloted mechanisms to provide continued access to this information, including refresher phone calls, text messages, and a toll-free information hotline. To generate vacancy information, enumerators visited factories during peak hiring periods each month and disseminated job opening information via text messages and automated phone calls over an eight-month period.
Follow-up data were collected through monthly Interactive Voice Response (IVR) phone surveys administered to both treatment and control participants over eight months. Participants received airtime compensation, and in-person follow-ups were conducted for hard-to-reach respondents. These surveys measured the study’s primary outcomes: beliefs about factory quality, reported job quality, wages, and recent job mobility. The study was powered to detect an 8-percentage-point increase in factory switching—after adjusting for multiple hypothesis testing and assuming 25 percent attrition—relative to a control mean mobility rate of 30 percent.
The completed study contributes to the growing literature on information and search frictions in labor markets in developing countries. While prior experimental work has emphasized demand-side information frictions related to worker ability (Abebe et al., 2018; Bassi and Nansamba, 2019; Carranza et al., 2019), this project provided new evidence on supply-side frictions related to job attributes. It also advanced understanding of how job information diffuses in low-income settings (Jensen, 2012; Oster and Steinberg, 2013; Dammert et al., 2013; Beam, 2016) and confirmed that reductions in search frictions disproportionately benefit female workers (Abebe et al., 2018). By jointly studying information and search frictions in the same context, the project clarified their relative importance and gendered impacts. Finally, the study contributed to a small but growing literature estimating the Value of a Statistical Life (VSL) in developing countries by leveraging an information intervention and explicitly including both men and women.