This paper investigates whether present bias correlates with savings and job search behavior in a population of low-skill workers in Ethiopia. I conduct a field experiment with 460 women who begin employment in the ready-made garment industry. Most are rural-urban migrants without work experience for whom the job represents a stepping stone into the labor market. Almost all workers plan to use their jobs to save money and to look for higher-wage employment, but many fall short of their intentions. I propose self-control problems as a candidate explanation. I elicit a measure of present bias in a tightly-controlled experiment and match results to high-frequency survey data that I collect over a period of three months. Present bias is a significant predictor of job search effort, controlling for liquidity and a broad range of covariates. Present-biased workers spend 57 percent less time on job search per week. As a result of reduced search, present-biased workers generate fewer offers and stay in their jobs significantly longer. In contrast, I find no significant correlation between present bias and savings behavior. I discuss implications for the design of commitment devices in this context.
This paper studies incentivized voluntary contributions to a charitable activity. Motivated by the market for blood donations in Germany, we study a setting where different incentives coexist and agents can choose to donate without receiving monetary compensation. This lets agents reveal and signal their individual preferences through their actions. In a model that interacts image concerns of agents with intrinsic and extrinsic incentives to donate, we show that this setting can bring about efficiency gains in the collection similar to those deriving from self-selection in second-degree price discrimination. We develop a laboratory experiment to test our theoretical predictions under controlled conditions. Results show that a collection system where compensation can be turned down can improve the efficiency of collection. Introducing the choice to be compensated does not crowd out unpaid donations. A significant share of donors chooses to donate without being compensated. Heterogeneity in treatment effects suggests gender-specific preferences over signaling.
We use a field experiment to study how social image concerns affect pledges to engage in a charitable activity. We work with two different blood banks and a municipal government in Germany to offer sign-ups for human whole blood donations. Motivated by a simple signaling framework, we randomly vary the type of organization to donate to and the visibility of the pledge. Our setting also provides natural variation in the group of people that form the "audience" for social image concerns. We find evidence for strong social image concerns when subjects are asked in public whether they would like to pledge a donation with a well-known charity. Pledges of our subjects do not to induce any charitable giving. Almost all subjects renege on their pledge, with no detectable differences between treatments.