Allocating labor across small firms: Experimental evidence on information constraints

Morgan Hardy, Seongyoon Kim, Jamie McCasland, Andreas Menzel and Marc Witte

Journal of Development Economics, 2024, vol. 171, issue C

Abstract: We document interest in labor reallocation among small firm owners in Ghana; 60% and 41%, respectively, self-report willingness to hire or work for the average local firm owner. Firm owners also exhibit high willingness-to-pay for information on a random subset of hiring firms and jobseeking firm owners during a Becker–Degroot–Marschak exercise. Conditionally random variation in access to this information generates immediate labor adjustments within and between firms, though rarely of firm owners themselves, and impacts firm closure 5-months post-intervention. Our findings suggest that labor market information of this kind is both valuable and actionable in our context.

Keywords: Small firms; Labor reallocation; Experiment; Information constraints (search for similar items in EconPapers)
JEL-codes: O14 O15 O17 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:171:y:2024:i:c:s0304387824000944

DOI: 10.1016/j.jdeveco.2024.103345

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