Worker Absences and Demand for Flexible Contracts by Suanna Oh

Join us for this week's event in the Behavioural, Experimental and Development Economics Seminar Series, Spring Term 2024

Join Suanna Oh, from the Paris School of Economics, as they present this week's seminar on Worker Absences and Demand for Flexible Contracts.  

Abstract

Worker absenteeism and high turnover remain common problems in developing labor markets, even while involuntary unemployment is prevalent. In India, the absence rate stands at 8% of worker-days among permanent manufacturing employees. We hypothesize that worker demand for flexibility affects labor supply decisions, both in terms of absence and selection into regular work arrangements. We test for the existence of a demand for flexible work among unskilled casual laborers in Odisha, India, and investigate the underlying motivations. We use an incentive-compatible choice experiment, which elicits preferences over pairs of contracts which vary in flexibility and the amount of attendance bonus. This allows us to empirically document workers’ willingness to pay for flexibility in terms of forgone wages. We also provide empirical evidence that social commitments are an important component of this demand. As network-based social obligations could have differential impacts on social groups’ labor supply, we also compare WTP for flexibility across caste groups, when the job is proximate (or not) to their village network. We combine the experimental findings with detailed survey data on the causes of absences, social network and practices, as well as risk and time preferences. This allows us to investigate: 1) how much workers value different dimensions of flexibility; 2) what drives workers’ need for flexibility; and 3) how the need for flexibility differs across caste networks.

This seminar will be held in the Economics Common Room on Wednesday 5 March, at 11.00am. This event is open to all levels of study and is also open to the public. To register your place, please contact the seminar organisers.

This event is part of the Behavioural, Experimental, and Development Economics Research Seminar Series.