DP19833 Informal Redistribution Through Work
We investigate work as informal redistribution and the drivers underlying these preferences. In a field experiment in Kampala, Uganda, we find that employers and workers consistently choose work redistribution over cash transfers, both revealing a willingness to pay for work. By randomizing work tasks---including busywork---we show that work production value does not explain work redistribution choices: employers pay for zero marginal product work. Choices are also not explained by relational benefits such as signaling or networking; instead, motivations are normative. Experimental evidence suggests a norm for work redistribution rooted in incentive arguments on the demand side, as employers stop requiring work when recipients have verifiable emergencies, and a combination of reciprocity and dignity from earning on the supply side. This norm impacts the organization of production: firms appear larger and less productive. Effective firm size is 6.4% smaller, and revenues per hour are 9.3% higher when accounting for symbolic work.
