What Aspects of Formality Do Workers Value? Evidence from a Choice Experiment in Bangladesh

Minhaj Mahmud, Italo A Gutierrez, Krishna B Kumar and Shanthi Nataraj

The World Bank Economic Review, 2021, vol. 35, issue 2, 303-327

Abstract: This study uses a choice experiment among 2,000 workers in Bangladesh to elicit willingness to pay (WTP) for job attributes: a contract, termination notice, working hours, paid leave, and a pension fund. Using a stated preference method allows calculation of WTP for benefits in this setting, despite the lack of data on worker transitions, and the fact that many workers are self-employed, which makes it difficult to use revealed preference methods. Workers highly value job stability: the average worker would be willing to forgo a 27 percent increase in income to obtain a one-year contract (relative to no contract), or to forgo a 12 percent increase to obtain thirty days of termination notice. There is substantial heterogeneity in WTP by type of employment and gender: women value shorter working hours more than men, while government workers place a higher value on contracts than do private-sector employees.

Keywords: informality; working conditions; choice experiment (search for similar items in EconPapers)
Date: 2021
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Working Paper: What Aspects of Formality Do Workers Value ? Evidence from a Choice Experiment in Bangladesh (2020)
Working Paper: What Aspects of Formality Do Workers Value? Evidence from a Choice Experiment in Bangladesh (2019)
Working Paper: What Aspects of Formality Do Workers Value? Evidence from a Choice Experiment in Bangladesh (2017)
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