Showing papers by "Michael Kremer published in 2010"

Early-life Malaria Exposure and Adult Outcomes: Evidence from Malaria Eradication in India

Abstract: We examine the effects of exposure to malaria in early childhood on educational attainment and economic status in adulthood by exploiting geographic variation in malaria prevalence in India prior to a nationwide eradication program in the 1950s. We find that the program led to modest increases in household per capita consumption for prime age men, and the effects for men are larger than those for women in most specifications. We find no evidence of increased educational attainment for men and mixed evidence for women.

Self-Control and the Development of Work Arrangements

Abstract: A significant part of the development experience is the change in the way work is structured. To use a historical example, the Industrial Revolution involved workers moving from agriculture to manufacturing; from working on their own to working with others in factories; and from flexible work-hours to rigid work-days. How are we to understand these changes? Why did they occur? What impacts did they have on labor productivity and possibly growth? In answering questions such as these, economic theories draw on different assumptions about aggregate production, market failures, and innovation. Yet almost all rely on one of two determinants of labor productivity: human capital and incentives. Human capital theories (broadly construed) emphasize how work arrangements utilize the distribution of human capital and, in learning models, facilitate its development. Incentive theories (again broadly construed) emphasize how workplace arrangements align worker payoffs to minimize moral hazard. In this paper, we bring together and advance a growing literature on a third feature: worker self-control. Individuals may not be able to work as hard as they would like. Some workplace arrangements may make self-control problems more severe, while others may ameliorate them. Below, we describe evidence from a field experiment broadly supportive of the selfcontrol perspective. We then argue that many work arrangements can be understood differently through this perspective. Specifically, we

Providing Safe Water: Evidence from Randomized Evaluations

Abstract: This paper uses a public economics framework to review evidence from randomized trials on domestic water access and quality in developing countries and to assess the case for subsidies. Water treatment can cost-effectively reduce reported diarrhea. However, many consumers have low willingness to pay for cleaner water; few households purchase household water treatment under retail models. Free point-of-collection water treatment systems designed to make water treatment convenient and salient can generate take-up of approximately 60% at a projected cost as low as $20 per year of life saved, comparable to vaccine costs. In contrast, the limited existing evidence suggests that many consumers value better access to water, but it does not yet demonstrate that better access improves health. The randomized impact evaluations reviewed have also generated methodological insights on a range of topics, including (a) the role of survey effects in health data collection, (b) methods to test for sunk-cost effects, (c) d...

Incentivizing Innovation: Adding to the Tool Kit

Abstract: Executive Summary Intellectual property rights (IPR) create incentives for research but impose static efficiency losses and other costs. In this essay, we discuss recent proposals of other mechanisms for rewarding innovation and argue that incremental experimentation with mechanisms that supplement rather than replace IPR can help to test and refine these mechanisms without undermining existing institutions. Prizes, such as those recently offered by the X‐Prize Foundation, have been successful in spurring research but have typically targeted demonstration projects rather than innovations capable of being used at scale. To spur the creation of products for widespread use, the design of prizes could be usefully extended by conditioning rewards on a market test, as in the recent $1.5 billion pilot Advance Market Commitment (AMC) for a pneumococcus vaccine.

Are Educational Vouchers Only Redistributive

Abstract: It is unclear if vouchers increase educational productivity or are purely redistributive, benefiting recipients by giving them access to more desirable peers at others’ expense. To examine this, we study an educational voucher programme in Colombia which allocated vouchers by lottery. Among voucher applicants to vocational schools, lottery winners were less likely to attend academic secondary schools and thus had peers with less desirable observable characteristics. Despite this, lottery winners had better educational outcomes. In this population, vouchers improved educational outcomes through channels beyond redistribution of desirable peers. We discuss potential channels which may explain the observed effects.

"Self-Control at Work: Evidence from a Field Experiment"

Abstract: How important are self-control problems at work? We describe a field experiment with data entry workers designed to answer this question. We examine two proxies for self-control and find evidence on both. First, workers’ effort increases as the (randomly assigned) payday gets closer, with productivity increases on paydays corresponding to 7% of mean daily production. Second, when given the choice, workers choose a dominated pay scheme—a linear contract which penalizes workers for not achieving a (self-chosen) threshold—over the same contract without the penalty. Workers also produce and earn 2% more when they have the ability to choose these “commitment contracts”. Both production effects are economically important: as big as 1⁄2 a year of schooling. We also find an important mediating role for uncertainty: the potential for exogenous shocks reduces the demand for commitment; this is especially true when commitment choices occur the evening before rather than the morning of the workday (after the uncertainty is resolved). We also find significant heterogeneity. Workers with larger payday effects have greater commitment demand and benefit more from being offered commitment contracts. To a lesser degree, elicited discount rates from monetary tradeoff experiments and subjective measures of self-control predict the commitment demand effects. Finally, we find that these effects neither diminish nor strengthen as workers gain experience. We argue that these results are hard to reconcile with other explanations such as worker confusion, social influences or signaling to employers. Finding an important role for self-control problems at work has implications for a variety of economic phenomena, from the evolution of workplace arrangements during the development experience to contract and workplace design.