Gender-Differentiated Selection and Outside Options
RCTReview
Male and female casual laborers face different alternative economic opportunities and household liquidity constraints. These structural differences alter how reservation wages signal worker ability in rural developing country labor markets.
Picture this
Consider a village day-labor market where men can do heavy physical construction while women primarily handle domestic chores. Men who demand higher minimum wages for casual sorting work often lack physical strength for heavy labor or face urgent cash shortages, leading to lower output; women, whose outside activities align closer with manual sorting, display no such negative skill selection when demanding higher wages.
What the evidence says
Women accept lower reservation rates (WTA is 2.3 to 3.0 MWK lower for women, p < 0.01), sort 0.76 more units per day, and make 0.16 fewer errors than men. The negative selection effect is driven exclusively by men, where a 10 MWK higher minimum WTA is associated with sorting 0.20 to 0.50 fewer units per day (p < 0.05); women display no significant selection relationship.
- Who was studied
- N = 689 participants (66.5% female, 33.5% male) across 1,875 daily decisions in rural Malawi.
- How
- Gender-stratified field experiment measuring daily willingness to accept (WTA) and piece-rate task productivity across agricultural seasons.
What to do
Evaluate gender-specific outside labor opportunities and household cash demands when designing targeted piece-rate incentive contracts.
From the source
"Furthermore, the overall negative selection effect is driven exclusively by men, for whom a higher minimum WTA is associated with lower output quantity. We do not observe significant selection among women."
Productivity in piece-rate labor markets: Evidence from rural Malawi