Corruption in hiring for public sector jobs is common in developing countries and has been thought to have a detrimental effect on government service delivery. This paper documents the workings and consequences of corrupt hiring systems with original data from a developing country health bureaucracy. Hiring decisions are shown to be based on a first-price, winner-pay auction, and those hired paid large bribes to get their jobs, averaging 17 months of salary. To establish the consequences of corruption, I collect data on the universe of potential applicants for these jobs and determine the sets of applicants and hires under merit-based hiring procedures, such as standardized testing. Contrary to conventional wisdom, actual hires are of a high quality and are even superior to hires under on a knowledge-based test. This result has a simple economic explanation: the key determinants of bribe offers (i.e. applicant wealth and willingness to pay) are strongly positively correlated with performance in the job. I discuss how the effects of corruption in hiring are heterogeneous and depend on factors such as the extent of rent-seeking opportunities afforded by the job. Misallocation can be minimal in hiring for jobs with limited opportunities for corruption, such as teachers and health workers, but is greater for jobs such as tax collectors or police officers.

Online Theory Appendix

Coverage: VoxDev

The Effect of Parental and Sibling Incarceration: Evidence from Ohio (with Sam Norris and Matt Pecenco)

Every year, millions of Americans experience the incarceration of a family member. Using 30 years of administrative data from Ohio and exploiting differing incarceration propensities of randomly assigned judges, this paper provides the first quasi-experimental estimates of the effects of parental and sibling incarceration in the US. Contrary to conventional wisdom, parental incarceration has relatively beneficial effects on children, reducing their likelihood of incarceration by 3.2 percentage points and improving their adult socioeconomic status. We also reject policy-relevant effects of parental incarceration on academic performance and teen parenthood. Sibling incarceration has similar effects, reducing incarceration likelihood by 6.7 percentage points.

Improving Last-Mile Service Delivery using Phone-Based Monitoring (with Karthik Muralidharan, Paul Niehaus and Sandip Sukhtankar) [Latest Draft] [NBER WP] [AEA registry] [submitted]

Improving "last mile" public-service delivery is a recurring challenge in developing countries. Could the rapid adoption of mobile phones provide a simple, cost-effective means to do so? We evaluate the impact of a phone-based monitoring system on improving the delivery of a program that transferred nearly a billion dollars to farmers in the Indian state of Telangana, using an at-scale experiment randomized across 5.7 million farmers. A randomly selected sample of officials were told that a representative sample of beneficiaries in their jurisdiction would be called to measure the quality of program implementation. This simple announcement led to a 1.5% increase in the number of farmers receiving their benefits, with a 3.3% increase among farmers in the bottom quartile of landholdings. The program was highly cost-effective, with a cost of 3.6 cents for each additional dollar delivered.

Coverage: Hindustan Times Op-ed, Financial Express

Marriage Markets and The Rise of Dowry in India (with Gaurav Chiplunkar)

Dowry payments are an important part of household finances in India, typically exceeding one to two years of household earnings. Yet there is little empirical evidence on determinants of dowry payments, with existing work relying on small and non-representative samples. In the first part of the paper, we leverage data on over 76,000 marriages to document stylized facts about changes in Indian marriage markets between 1930-2000. We show that although many marriage practices remain static over this time period, there were large changes in dowry payment. Between 1930-1975, the proportion of marriages with any dowry paid increased from 35-40% to nearly 90%. Over the same period, median real dowry more than doubled, but decreased after 1975 in real terms as well as a fraction of household income. In the second half of the paper, we use this data to test major theories of dowry: (i) whether dowry serves as a bequest to female children or is a groom price; (ii) if the increase in dowry prevalence resulted from lower castes adopting high caste practices (Sanskritization); (iii) how changes in sex ratios on the marriage market affect dowry (Marriage squeeze hypothesis); and (iv) if changes in dowry can be explained by hypergamy and cross-caste competition for grooms. We find that the patterns in the data do not support these theories, but instead that the changes are explained by shifts in the quality (earnings/education) distribution of brides and grooms. This has important implications for designing anti-dowry policies.

Coverage: Live Mint

Works in Progress

Timing of Cash Transfers and Child Health (with Karthik Muralidharan, Paul Niehaus and Sandip Sukhtankar) [AEA registry]

Designing Hiring Systems: Theory and Empirical Evidence

The Long-Run Effects of Solitary Confinement (with Sam Norris and Matt Pecenco)

Currently Inactive Papers

Minimum Wage and Price Pass-through (with Sharat Ganapati)