Job change and self-control of waste pickers: evidence from a field experiment in the Philippines
-
DOIhttp://dx.doi.org/10.21511/ee.09(2).2018.02
-
Article InfoVolume 9 2018, Issue #2, pp. 22-35
- 1356 Views
-
217 Downloads
This work is licensed under a
Creative Commons Attribution-NonCommercial 4.0 International License
Environmental policies may have a negative side effect on employment, often in a specific industry in the short run. Workers in regulated industries can be affected by losses in job-specific human capital. The informal sectors in developing countries are often associated with environmental pollution and thus targeted by such policies. Welfare loss due to this side effect can be problematic in developing countries, since they often lack safeguarding schemes, including unemployment insurance. Inducing workers in informal sectors to change their jobs can mitigate these negative side effects. This study examines efficient methods of inducing informal workers to change jobs. An alternative job is offered to informal workers at a dumpsite in the Philippines and whether changing the scheme of wage payment increases the acceptance of the offer is examined. The impacts of changing payment schemes are evaluated by using a randomized field experiment. The sampled 112 waste pickers each randomly receive one of four offers for an alternative job, and the number of those who accept the offer is observed to evaluate the impact of less frequent payment (i.e., once every three days instead of daily). Piece rates and fixed wages are also compared. Those offered less frequent payment are more likely to accept the job offer compared with those offered daily payment. This preferred payment scheme can mitigate the side effects of environmental policy and workers’ self-control problem related to savings, while minimizing moral hazard.
- Keywords
-
JEL Classification (Paper profile tab)J33, M52, O13, Q53
-
References38
-
Tables5
-
Figures1
-
- Fig. 1. Experimental design and sample sizes
-
- Table 1. Payment schemes of the four groups
- Table 2. Summary statistics by group
- Table 3. Accepting a job offer: marginal effects (logit estimations)
- Table 4. Accepting a job offer with interaction terms: coefficients (logit estimations)
- Table A1. Workers’ characteristics by participation status
-
- Agunwamba, J. C. (2003). Analysis of scavengers? Activities and recycling in some cities of Nigeria. Environmental Management, 32, 116-127.
- Albrecht, J., Navarro, L., & Vroman, S. (2009). The effects of labour market policies in an economy with an informal sector. Economic Journal 119, 1105-1129.
- Ashraf, N., Karlan, D., & Yin, W. (2006). Tying Odysseus to the mast: Evidence from a commitment savings product in the Philippines. Quarterly Journal of Economics, 121, 635-672.
- Asim, M., Batool, S. A., & Chaudhry, M. N. (2012). Scavengers and their role in the recycling of waste in Southwestern Lahore. Resources, Conservation and Recycling, 58, 152-162.
- Baksi, S., & Bose, P. (2016). Informal sector, regulatory compliance, and leakage. Journal of Development Economics, 121, 166-176.
- Birkbeck, C. (1978). Self-employed proletarians in an informal factory: the case of Cali’s garbage dump. World Development, 6, 1173-1185.
- Biswas, A. K., Farzanegan, M. R., & Thum, M., (2012). Pollution, shadow economy and corruption: theory and evidence. Ecological Economics, 75, 114-125.
- Blackman, A., & Bannister, G. J. (1998). Community pressure and clean technology in the informal sector: an econometric analysis of the adoption of propane by traditional Mexican brickmakers. Journal of Environmental Economics and Management, 35, 1-21.
- Blackman, A., Shih, J.-S., Evans, D., Batz, M., Newbold, S., & Cook, J. (2006). The benefits and costs of informal sector pollution control: Mexican brick kilns. Environment and Development Economics, 11, 603-627.
- Bovenberg, A. L., & van der Ploeg, F. (1994). Environmental policy, public finance and the labour market in a second-best world. Journal of Public Economics, 55, 349-390.
- Bryan, G., Karlan D., & Nelson, S. (2010). Commitment devices. Annual Review of Economics, 2, 671-698.
- Cano-Urbina, J. (2015). The role of the informal sector in the early careers of less-educated workers. Journal of Development Economics, 112, 33-55.
- Chaudhuri, S., & Mukhopadhyay, U. (2006). Pollution and informal sector: a theoretical analysis. Journal of Economic Integration, 21, 363-378.
- Fugazza, M., & Jacques, J.-F. (2004). Labor market institutions, taxation and the underground economy. Journal of Public Economics, 88, 395-418.
- Gill, K. (2007). Interlinked contracts and social power: patronage and exploitation in India’s waste recovery market. Journal of Development Studies, 43, 1448-1474.
- Greenstone, M. (2002). The impacts of environmental regulations on industrial activity: evidence from the 1970 and 1977 Clean Air Act Amendments and the Census of Manufactures. Journal of Political Economy, 110, 1175-1219.
- Gutberlet, J., & Baeder, A. M. (2008). Informal recycling and occupational health in Santo Andre, Brazil. International Journal of Environmental Health Research, 18, 1-15.
- Hayami, Y., Dikshit, A. K., & Mishra, S. N. (2006). Waste pickers and collectors in Delhi: poverty and environment in an urban informal sector. Journal of Development Studies, 42, 41-69.
- Kaur, S., Kremer, M., & Mullainathan S. (2015). Self-control at work. Journal of Political Economy, 123, 1227-1277.
- Lazear, E. P. (1995). Personnel Economics. Boston: Massachusetts Institute of Technology.
- Lazear, E. P. (1998). Personnel Economics for Managers. New York: Wiley.
- Liu, M., Shadbegian, R., & Zhang, B. (2017). Does environmental regulation affect labor demand in China? Evidence from the textile printing and dyeing industry. Journal of Environmental Economics and Management.
- Medina, M. (1998). Border scavenging: a case study of aluminum recycling in Laredo, TX and Nuevo Laredo, Mexico. Resources Conservation and Recycling, 23, 107-126.
- Medina, M. (2000). Scavenger cooperatives in Asia and Latin America. Resources Conservation and Recycling, 31, 51-69.
- Moreno-Sanchez, R. D. P. & Maldonado J. H. (2006). Surviving from garbage: the role of informal waste-pickers in a dynamic model of solid-waste management in developing countries. Environment and Development Economics, 11, 371-391.
- Nzeadibe, T. C. (2009). Solid waste reforms and informal recycling in Enugu Urban Area, Nigeria. Habitat International, 33, 93-99.
- Parizeau, K. (2015). When assets are vulnerabilities: an assessment of informal recyclers livelihood strategies in Buenos Aires, Argentina. World Development, 67, 161-173.
- Paul, J. G., Arce-Jaque, J., Ravena, N., & Villamor, S. P. (2012). Integration of the informal sector into municipal solid waste management in the Philippines: what does it need? Waste Management, 32, 2018-2028.
- Peters, J., Langbein, J., & Roberts, G. (2016). Policy evaluation, randomized controlled trials, and external validity: a systematic review. Economics Letters, 147, 51-54.
- Prendergast, C. (1999). The provision of incentives in firms. Journal of Economic Literature, 37, 7-63.
- Romallosa, A., & Kraft, E. (2017). Feasibility of biomass briquette production from municipal waste streams by integrating the informal sector in the Philippines. Resources, 6, 12.
- Sasaki, S., & Araki, T. (2013). Employer–employee and buyer–seller relationships among waste pickers at final disposal site in informal recycling: the case of Bantar Gebang in Indonesia. Habitat International, 40, 51-57.
- Shearer, B. (2004). Piece rates, fixed wages and incentives: evidence from a field experiment. The Review of Economic Studies, 71, 513-534.
- Tirado-Soto, M. M., & Zamberlan F. L. (2013). Networks of recyclable material waste-picker’s cooperatives: an alternative for the solid waste management in the city of Rio de Janeiro. Waste Management, 33, 1004-1012.
- Walker, W. R. (2011). Environmental regulation and labor reallocation: evidence from the Clean Air Act. American Economic Review, 101, 442-447.
- Walker, W. R. (2013). The transitional costs of sectoral reallocation: evidence from the Clean Air Act and the workforce. Quarterly Journal of Economics, 128, 1787-1835.
- Wilson, D. C., Araba, A. O., Chinwah, K., & Cheeseman C. R. (2009). Building recycling rates through the informal sector. Waste Management, 29, 629-635.
- Zaied, Y. B., Cheikh, N. B., Nguyen P., & Mahjoub, M. B. (2018). Waste management policy and employment: the case of France. Environmental Economics, 9, 38-46.