Work in progress

Light Touch Psychological Interventions with Economic Effects

Aspiring to a Better Future: Can a Simple Psychological Intervention Reduce Poverty? (with Rob Garlick, Mahreen Mahmud, Richard Sedlmayr, Johannes Haushofer, Stefan Dercon) 

Revision requested: Review of Economic Studies

Do higher aspirations for the future motivate people living in poverty to make long-term investments? Do their aspirations increase when economic conditions improve, or might persistently low aspirations limit investment? To answer these questions, we run a 415-village field experiment with 8,300 women living in poverty in rural Kenya. We design an 80-minute workshop to help people set higher aspirations and plan to achieve them via teaching psychological techniques. We cross-randomise this with large unconditional cash transfers. The workshop substantially raises aspirations, labour supply, investment, revenue, and living standards 17 months later, relative to a placebo workshop. Increases in aspirations are the most likely mechanism to explain the economic effects. Cash transfers also raise aspirations, partly explaining a high propensity to invest from the transfer. We conclude aspirations respond to both economic and psychological interventions, contribute to investment decisions and living standards, and may be promising targets for development policy.

The Future in Mind: Short and Long Run Impact of an Aspirations Intervention in Rural Ethiopia (with Tanguy Bernard, Stefan Dercon, Giulio Schinaia and Alemayehu Seyoum Taffesse)

Reject and resubmit: Quarterly Journal of Economics

Aspirations have been posited to condition the future-oriented choices of individuals and thus can play a role in the persistence of poverty or the effort to break out of it. In a randomised control trial in remote, rural Ethiopia, we assess the effectiveness of an intervention seeking to change how poor people perceive their future opportunities, alter their aspirations and, through that, modify their investment decisions. A treatment group was shown video documentaries about the lives of individuals from similar communities who escaped poverty through their own efforts and, as such, can serve as role models. Five years after the screening took place, the treated households increased future-oriented investments in agriculture and in children’s education. The results can be explained by the increase in aspirations in terms of lifetime goals. Overall, this research uniquely provides evidence that a light-touch behavioural intervention can have persistent economic impacts on a poor population.

Effects of Limited Information about Workseekers' Skills 

Jobseekers’ Beliefs about Comparative Advantage and (Mis)Directed Search (with Rob Garlick,  Lukas Hensel and Andrea Kiss). IZA Discussion Paper 16522.

Worker sorting into tasks and occupations has long been recognized as an important feature of labor markets. But this sorting may be inefficient if jobseekers have inaccurate beliefs about their skills and therefore apply to jobs that do not match their skills. To test this idea, we measure young South African jobseekers’ communication and numeracy skills and their beliefs about their skill levels. Many jobseekers believe they are better at the skill in which they score lower, relative to other jobseekers. These beliefs predict the skill requirements of jobs where they apply. In two field experiments, giving jobseekers their skill assessment results shifts their beliefs toward their assessment results. It also redirects their search toward jobs that value the skill in which they score relatively higher – using measures from administrative, incentivized task, and survey data – but does not increase total search effort. It also raises earnings and job quality, consistent with inefficient sorting due to limited information.

Workers' Preferences and Beliefs

Occupational Segregation and Gender Gaps in Nairobi: Disentangling Supply from Demand and Preferences from Beliefs using Worker and Employer Surveys (with Inbar Amit, Alison Andrew, Nate Barker, Rob Garlick, Carole Nekesa)

In field

We examine four interlinked questions related to occupational segregation and wage inequality by gender in Nairobi, Kenya: (how) do employers treat women and men differently in the hiring process? (How) do gendered differences in preferences over job attributes and beliefs about the labour market shape differences in women’s and men’s employment choices and search strategies? How does providing accurate information to workers about the attributes employers value and their recruitment strategies affect men’s and women’s search strategies? And finally, what is the role of each of these factors in explaining occupational segregation by gender?  We will first measure firms’ preferences and beliefs about jobseekers’ responses to offers, by having firms rate hypothetical CVs that vary over attributes, including gender and parenthood. We will then survey young female and male jobseekers, and measure their preferences over job attributes and beliefs about job search by combining belief- and choice-based instruments.  Next, we will use results from the firm-side survey to experimentally vary the information sets of jobseekers about the attributes firms in different sectors value, and the methods they use to recruit. From there, we will survey treated and untreated individuals with a high-frequency phone survey about their job search and work behaviour. Finally, we will use these data to structurally estimate a model of job search and hiring, which we use to quantify the relative importance of search and hiring in gender gaps in wages and employment by occupation. 

Economic Effects of Mental Health Interventions

Treating Mental Health Conditions Improves Labor Market and Other Economic Outcomes in Low and Middle-Income Countries (with Crick Lund,  Marc Witte, Thandi Davies, John Walker, Johannes Haushofer, Sarah Murray, Judy Bass, Laura Murray, Vikram Patel)

Email for draft

Does treating mental health conditions improve labor market and other economic outcomes in low and middle-income countries? We run a systematic search for all randomized controlled trials (RCTs) which evaluate mental health treatments and measure economic outcomes in these countries. We conduct frequentist and Bayesian meta-analyses on estimates of treatment effects from 39 interventions. Treatments reduce the number of days participants cannot work by 16%, reduce the probability of being unable to work by 9 percentage points (26%), and improve qualitative measures of performance at work. They increase asset wealth and education investment. Results suggest multiple psychological and behavioral mechanisms.

Digital Delivery of Behavioural Activation to Overcome Depression and Facilitate Social and Economic Transitions of Adolescents in LMICs (DoBAt)

Intervention being piloted 

Depression is the leading cause of disability worldwide, and it is particularly problematic among adolescents given the risk for greater depression chronicity across the lifespan. Untreated depression exerts a huge economic toll as it impairs cognitive functioning, interpersonal relationships, interferes with schooling and disrupts work and productivity. These impairments have a greater impact on adolescents in low- and middle-income countries due to the additional adversities they face and the lack of available, effective treatments.

This three year project will use smartphones to deliver a digital intervention for adolescents, supported by local lay counsellors, to reduce depression and facilitate successful transitions to adulthood. We will adapt a tailored psychological therapy, Behavioural Activation (BA), among adolescents (15 to 19 years old) living in rural South Africa and Uganda. We will test the effectiveness of delivery of BA for reducing depression (primary outcome), and possible mechanisms, principally executive function and social cognition. As secondary outcomes, we will assess risk-taking behaviours and a range of human capital outcomes. Further, the proposed work will produce relevant measures of executive functions and social cognition through language translation and cultural adaptation and evaluate their reliability and validity in a rural context.

The team comprises a multidisciplinary group of psychologists, psychiatrists, neuroscientists and economists from South Africa (University of the Witwatersrand), Uganda (BRAC),  as well as from the UK (University of Oxford, University of Exeter, University College London) and the USA (University of California, Los Angeles, UCLA).

Long-term Stress Exposure, Mental Health and Job Search in Kenya (with Ulrike Malmendier and Matthew Ridley)

Economic and Political Effects of Unconditional Cash Transfers

Cash Transfers and Community Participation in Public Affairs:  A Village-Level Randomized Controlled Trial in Kenya (with Michael Walker) 

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We provide causal evidence on how a large NGO-run cash transfer programme affects household civic and political participation and household requests for resources from local politicians. We randomly allocated the roll-out of GiveDirectly’s unconditional cash transfer programme, which provides transfers to poor households meeting a basic means test in treatment villages, across over 1,000 villages in Western Kenya. We collect survey data from over 10,800 households (both those poor enough to be eligible to receive the transfer and ineligible households) and 1,200 local leaders during the period after the 2017 election. Receiving a cash transfer does not affect household's voter turnout, vote choice, or favourability ratings of candidates. Voters (correctly) do not attribute the programme to local leaders. We find cash recipient households shift out of lower-level, "subsistence'" political engagement to higher-value group engagement. Namely, recipient households decrease private exchanges of patronage with politicians by attending fewer rallies (for which they receive small payments), making fewer requests for private support, and receiving fewer offers to sell votes. Recipient households join more community groups, and increase their contributions to group fundraisers; groups in cash villages make more requests to local leaders and receive more funding from outside sources. These group fundraisers raise significantly more than private requests. However, ineligible households in cash villages make more low-level exchanges. We find no changes in processes to allocate public goods funding. Results suggest aid programmes have few effects on electoral outcomes in this context, neither altering vote choices nor reducing the overall presence of clientelist relationships. They also suggest poor people’s involvement in local processes may be limited by the time and monetary cost of participation, as there is a strong participation gradient by wealth for households in control villages. As well as reducing poverty, transfer programs may enable increased participation in such processes.

Voters' Beliefs and Voter Turnout

Everybody Loves a Winner: A Field Experiment Providing Information on Polls in South Africa (with Brynde Kreft)

I show voters process information from pre-election polls using crude heuristics: they are overly swayed by whether a party is just winning a poll, compared to just losing. I conducted a field experiment with 2,023 low-income registered black voters from Johannesburg in South Africa’s 2016 elections. I provided two treatment groups with information from two different IPSOS polls. The polls both predict a close election and provide statistically indistinguishable predictions about vote shares. In one, the challenger party is ahead by a tiny margin; in another, the incumbent party is barely ahead. The difference in effect of the two polls is the effect on voters of a party being the narrow leader in a poll, compared to being the narrow loser. Supporters of the party just ahead in the polls are 10 percentage points more likely than a placebo group to turn out to vote (using verified measures) and 12 percentage points more likely to vote for their party (in self-reported measures); there are no effects on voters who learn their party is just behind. Voters who learn a party is just winning rate the party more highly, are more likely to support the party, and believe the party will win a higher share of the vote, compared to if they learn that party is barely losing, although the information about party quality and likely vote in both polls is similar. These effects imply that how the media frames poll results may have large effects on electoral outcomes.