Job Market Paper
Abstract: Corruption in hiring for public sector jobs is common in developing countries, and has been assumed to have a detrimental effect on delivery of government services. This paper provides a framework for understanding this type of corruption and demonstrates that it need not have negative consequences. I collect original data from a hiring process for managerial positions in a developing country health bureaucracy, and find that hires paid large bribes, averaging 17 months' salary. I use data on bribe offers to characterize the structure of these markets, showing that job allocations are made as if via a first-price, winner-pay, sealed bid auction. To establish the consequences of corruption, I estimate a structural model of entry to determine the identity of hires under counterfactual hiring procedures, such as standardized testing, and compare them to actual hires. For this comparison, I identify causal relationships between a set of hire characteristics and better delivery of health services. Based on these characteristics, actual hires are of comparable or superior quality to the counterfactual hires, e.g. as compared to hires under a knowledge-based test, actual hires are 4.3-8.7 percentage points closer to the predicted optimal set of hires. This is explained by a novel mechanism in my model: although hiring decisions are based primarily on bribes, hires are high quality because applicant wealth and willingness to pay for the position are strongly positively correlated with quality. Applying this to a general model of hiring, I identify the environments in which corruption will lead to misallocation, discuss how anti-corruption efforts should be designed, and argue for a greater focus on hiring for mid-level government managers. 

Working Papers

While the vast majority of minimum wage research has focused on possible disemployment and labor market effects, this paper examines its effect on prices. Utilizing detailed transaction-level datasets, we find minimal pass-through of minimum wage changes onto retail and grocery prices. This finding is robust to a number of identification strategies, such as matching counties across state boundaries, and is precisely identified. Additionally, we do not find evidence for anticipation/retrospective adjustment in prices, heterogeneous responses based on the size of the minimum wage change, or heterogeneous effects on consumers of different income groups. Data from the Quarterly Census of Employment and Wages rationalize these findings. Since labor is a relatively small portion of total costs in this sector and the effect of the minimum wage on labor costs is modest, this leads to minimal response in prices. Estimates from other industries suggest that, aside from the restaurant and fast-food sectors, this low pass-through holds more generally. 

The Rise of Dowry in India: Causes and Consequences (joint with Gaurav Chiplunkar) [draft available on request]

Works in Progress

Designing Hiring Systems: Theory and Empirical Evidence

Beliefs and Bribes: Police Corruption in India (joint with Abhijit Banerjee, Esther Duflo, John Firth, Dan Keniston and Ben Olken) (first round of data-collection complete)