What Aspects of Formality Do Workers Value? Evidence from a Choice Experiment in Bangladesh
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 forego a 27 percent increase in income to obtain a 1-year contract (relative to no contract), or to forego 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.
| Main Authors: | , , , |
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| Format: | Working Paper biblioteca |
| Language: | English |
| Published: |
World Bank, Washington, DC
2020-01
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| Subjects: | INFORMALITY, WORKING CONDITIONS, CHOICE EXPERIMENT, LABOR MARKET, CONTRACT, TERMINATION NOTICE, WORKING HOURS, PAID LEAVE, PENSION FUNDS, EMPLOYMENT BENEFITS, JOB STABILITY, GENDER, |
| Online Access: | http://documents.worldbank.org/curated/en/428331578944574540/What-Aspects-of-Formality-Do-Workers-Value-Evidence-from-a-Choice-Experiment-in-Bangladesh https://hdl.handle.net/10986/33192 |
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| Summary: | 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
forego a 27 percent increase in income to obtain a 1-year
contract (relative to no contract), or to forego 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. |
|---|