Is a factory job better than a cash grant and some training? Chris Blattman and Stefan Dercon have a recent study in Ethiopia where they test these two options with a randomized-controlled trial. Back in December, Chris Blattman discussed with study with Russ Roberts on the EconTalk podcast.
In one interesting bit, Blattman highlights how holding onto an idea and repeatedly seeking an opportunity to implement it can ultimately bear fruit. I transcribed it (abridging a little for readability).
Since you have 300 people lining up for these jobs, instead of taking the first 50 in line who are qualified for the job and hiring them, why not see if we can find a factory owner who will find 150 who are qualified and instead of taking the first 50, we’ll flip a coin and we’ll take 50 out of those 150 qualified applicants as random and we’ll follow them over time and we’ll look at what happens to their incomes and their health and their career trajectories.
I had this idea as a graduate student 10 or 12 years ago, and I always thought, “Every time I meet a factory owner I’m going to feel him out. And I did. Once in a while I’d be on a plane to Uganda to work on one of my projects, usually related to poverty or conflict, and maybe I’d sit by a factory owner, and I’d say here’s this idea that I have, and they’d usually look at me kind of funny. They wouldn’t leap at the possibility. I was just this person they met on a plane, and I was a graduate student. I probably didn’t approach it well, and so it never really materialized.
So I was at a conference in London and there was an Ethiopian businessman who was sort of a real estate mogul. He was giving a talk to a group of development economics at the International Growth Centre, and I approached him afterwards and said, “That was terrific,” and I really enjoyed talking to him and we kept chatting and I said, “I had this idea. I think that your firms not only help achieve growth, but I think they might actually be tools of poverty alleviation. Here’s an easy way to answer that question.” And he said, “That sounds great. Let’s do it.” And so literally five or six weeks later we were on the ground in Ethiopia doing the first randomization.
I recommend the whole conversation.