Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/196619 
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12121
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Using a choice experiment among 2,000 workers in Bangladesh, we to elicit willingness to pay (WTP) for specific job benefits typically associated with formal employment. We find that workers value job stability the most; the average worker would be willing to forego a 27 percent increase in monthly income in order to obtain a 1-year written contract (relative to no contract), or to forego a 12 percent increase to obtain thirty days of termination notice. On average, government workers place a higher value on contracts than do private sector employees, while casual workers particularly value higher pay. Our use of choice experiments to overcome the challenges associated with estimating WTP for specific job benefits from hedonic wage regressions or from observed job transitions is of interest in its own right, especially in a developing country context where data on worker transitions are unavailable and many workers are informally employed.
Subjects: 
informality
worker benefits
discrete choice experiments
JEL: 
J46
J32
J81
Document Type: 
Working Paper

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