Productivity and Society

Brandon Williams

Development Economics

September 10, 2024

Ethnic Divisions & Production in Firms (2014)

  • Longstanding political and social divides along tribes in Kenya, examined in the context of a flower plant with random teams

Ethnic Divisions & Production in Firms (2014)

  • Longstanding political and social divides along tribes in Kenya, examined in the context of a flower plant with random teams
  • Three big results:
    • Vertical discrimination led to less productive mixed teams (both vertically and horizontally)
    • Output gap nearly doubled when political conflict caused tensions to rise between groups
    • Introducing team pay eliminated most of the output gap in horizontally mixed teams

Ethnic Divisions & Production in Firms (2014)

Ethnic Divisions & Production in Firms (2014)

\max_{e_{s1},e_{s2}} w(f(e_{s1},\alpha_s,e1,\alpha_1)+f(e_{s2},\alpha_s,e2,\alpha_2))-d(e_{s1}+e_{s2}) + \\ \theta_1(2wf(e_{s1},\alpha_s,e1,\alpha_1)-d(e_1))+\theta_2(2wf(e_{s2},\alpha_s,e2,\alpha_2)-d(e_2))

production based on

effort and ability

supplier cost

of effort

weight on processor type

  • Importance of theory: Very hard to distinguish between taste-based and statistical discrimination

 

 

 

 

 

 

Ethnic Divisions & Production in Firms (2014)

  • Importance of theory: Very hard to distinguish between taste-based and statistical discrimination

 

 

 

 

 

 

  • Non-taste-based explanations can't simultaneously rationalize:
    • drop in mixed teams' output under conflict
    • equalization of down-stream output under team pay
\max_{e_{s1},e_{s2}} w(f(e_{s1},\alpha_s,e1,\alpha_1)+f(e_{s2},\alpha_s,e2,\alpha_2))-d(e_{s1}+e_{s2}) + \\ (\theta_1+\theta_2)w(f(e_{s1},\alpha_s,e1,\alpha_1)+f(e_{s2},\alpha_s,e2,\alpha_2))-\theta_1d(e_1))-\theta_2d(e_2)

production remains the same

average weight

of processor types

now paid on joint work

Religious Divisions & Production Technology

  • Processed food plant in West Bengal, employs both Hindus (majority group) and Muslims (minority), with a history of conflict.
  • Group composition randomly assigned (with some limitations), with high- and low-dependency tasks (quasi-randomly assigned)
  • Key findings:
    • Religious diversity negatively affects team output, but only in HD tasks
    • The difference in output attenuates over time (20% gap to 1%), driven by gains in mixed HD teams
    • Reduction in negative out-group attitudes in HD mixed groups

Religious Divisions & Production Technology

Religious Divisions & Production Technology

  • "It is insightful and non-obvious that the largest positive effects of treatment on attitudes occurred in teams that also suffered the largest negative output shocks."
  • Some thoughts:
    • It might have been better to collect more information about beliefs and attitudes before endline
    • Does the best possible to reconcile design limitations (e.g. no Muslim only teams) with robustness checks using observables, but wouldn't have to do this in a perfect world
    • Full model gets relegated to the appendix