Goals for Development: Experimental Evidence from Cassava Processors in Ghana by Elena Cettolin

Join us for the another event in the Microeconomics Research Seminar Series, Summer Term 2022

Elena Cettolin from the Department of Economics, Tilburg School of Economics and Management will present their microeconomics research on Goals for Development: Experimental Evidence from Cassava Processors in Ghana

Abstract

Lack of capital, technology and management skills are known to be barriers for small firm growth in developing countries. However less attention has been given to improve performance of labor. We test whether setting non-binding production goals can improve workers’ performance in small agricultural processors in Ghana. We first train workers and employers to measure their daily production, and after a month, we randomly assign a sub-sample of them to implement daily production goals for the subsequent month. We find a significant positive effect of goal setting on workers’ performance: compared to their counterparts who only measure production, workers that set goals increase daily output by 16%, work around 40 minutes longer per day and are 9% more productive per hour. Average product of labor increases by 14%. The data suggest that goals act as a commitment device for workers with self-control problems and ignite their competitive spirit. This paper provides a proof of concept that goal setting can be an effective and inexpensive practice to foster small firm growth.

This event is part of the Microeconomics Research Seminar Series.