Ruchi Mahadeshwar

Evidence shows that criminalizing participation in the market for sex often reduces welfare for sex workers. We use a field experiment in Cambodia to demonstrate that this trade-off between decreasing market size and worker welfare can be avoided. We randomize two interventions aimed at improving labor market conditions for sex workers. We find that incentivizing the outside work option increased outside option earnings by 20% and decreased sex work by 13%, resulting in a 13% increase in overall earnings. These price effects do not appear to be driven by income effects, as a separate unconditional cash transfer intervention did not decrease sex work. We use our results to estimate a cross-price labor supply elasticity of -0.57 between sex and non-sex work and an own-price labor supply elasticity of 0.45 for non-sex work. To generalize these findings to other outside options, we develop a model of labor choice; our calibration implies that, on the margin, the additional disutility from sex work is 16 times that of non-sex work. Overall, our paper shows that because labor supply for sex work is elastic, policies that leverage workers’ responsiveness to prices can decrease the size of the market for sex without compromising worker welfare.

NEUDC, Washington University in St. Louis EGSC, UChicago AFE 2024, GRIPS Applied Economics Seminar

The Weiss Fund, Bravo Center Research Grants, Mellon Foundation

Using a field experiment among garment factory workers in Cambodia, we estimate the effects of randomly disclosing spousal income on productivity in a standardized work task. Recent work has shown the significant effect of information asymmetry on spousal bargaining. However, the impact of this asymmetry on productivity, and subsequently the overall pool of resources available for bargaining, is often overlooked. We find that the disclosure of income significantly impacts how much income is earned compared to a nondisclosure scenario where spouses can decide the amount they report to their spouse, and, therefore, how it is allocated. The effects differ dramatically by gender: when income is disclosed to their spouses, women tend to decrease productivity. By contrast, men do the opposite: when income is disclosed, they increase productivity. We reconcile these findings with a model where spouses’ bargaining power and the cost of misreporting income determine their effort in anticipation of whether they can be the residual claimant of that income or be forced to bargain over it. Overall, this study sheds light on the unintended consequences of financial or pay transparency policies on both productivity and household inequality.

SAEC 2024, CES NORTH AMERICA 2024, JADE 2024, SEHO 2024, COSME Gender Economics Workshop 2024

Bravo Center Research Grants

BOOM Live

Performance-based pay is often considered the "magic cure" for low productivity in many sectors. However, despite past studies supporting the effectiveness of performance pay in motivating individual worker effort, its overall impact on the organizational level remains uncertain, particularly given the long and multifaceted transition from the most common pay structure, fixed pay, to performance pay. This paper presents a unique natural experiment in the Cambodian garment manufacturing sector, where a large factory implements two major interventions that break down the mechanisms of the transition to performance-based pay system: a worker performance monitoring system and a performance-based wage scheme. Leveraging the staggered roll-out of these interventions, our findings reveal that both performance monitoring and performance pay significantly improve productivity. This improvement is driven not only by motivating individual effort but also by changing turnover rates among less productive workers and improving the alignment of workers with production lines.

NSF Doctoral Dissertation Research Improvement Awards, IFREE Small Grants

Information frictions are common in many markets. In areas with a high prevalence of both HIV and transactional sex, we examine the effects of new diagnostics that enable sexual partners to learn each other’s HIV status. We find that access to at-home HIV tests increases women’s income from transactional sex, without negatively affecting their health outcomes. The higher income stems from both more transactional sex and reduced condom use. The decrease in condom use occurs mainly with ex ante high-risk partners who test HIV-negative, suggesting that the new diagnostics enable women to overcome the risk-income trade-off associated with transactional sex.

BREAD 2022 [Click for Video], UChicago AFE 2022, UChicago BFI Health Economics Conference 2022, Economic Demography Workshop 2022, MIEDC 2022, Brown-MIT Development Workshop 2022, HBS Rising Scholars Conference 2022