The Role of Aspirations in Collective Action and Labor Markets

Abstract

A growing literature in economics seeks to explain why people remain poor. Classical theories explained the persistence of poverty with constraints that are external to an individual such as market imperfections and coordination problems. Recently economists explored the role of aspiration failures as an internal constraint in escaping from poverty. Aspiration failures occur when individuals fail to make investments because of too low or too high aspirations. Aspirations are formed through own experiences, but also by the achievements of individuals one can observe. Individuals living in poverty and an economically polarized society are argued to lack the resources and successful examples and are therefore prone to have low aspirations for their future. Yet, empirical evidence on the relation between aspirations and investments and ways of increasing aspirations is still scare. This thesis provides insights into the role of aspirations in several development outcomes. First, the thesis investigates how aspirations affect cooperation in collective action. We propose that cooperation depends on the goals one has for the wellbeing of one’s community and refer to those as community aspirations. Individuals could lack aspirations for their community that prevent them from investing into collective action. In the first paper of the thesis we conceptualize community aspirations, provide empirical measures for community aspiration dimensions and test whether our proposed measure is correlated with cooperation behavior in the field. We find some support that community aspirations are positively correlated with cooperation using experimental and survey measures. In a second step we implemented a randomized controlled trial in 37 Zambian villages in 2018 to investigate whether exposure to role models can increase community aspirations and investments into public goods. In treatment villages participants watched one of two role model videos that showed similar villages which successfully organized themselves into village clubs. We find that exposure to role models increases contributions to the public good and decreases community aspirations, while there is a positive effect on perceived participation beliefs. The latter suggests that the effect could run through a change in expectations of other people’s behavior. We investigate a potential mechanism in the second paper of the thesis. Using a lab-in-the-field experiment with 358 individuals in eight Zambian villages, we analyze whether presenting the role models with descriptive or additional prescriptive messages is more successful at promoting cooperation. Additionally we varied who of the participants in the group of two was shown a treatment video to assess whether cooperation only increases if there is knowledge on shared higher community aspirations. We find that the descriptive video increases unconditional contributions to the public good compared to the no video condition. Unconditional and conditional contributions are larger if both participants watched the descriptive video compared to watching no video. The third study part of the thesis examines the role of individual aspirations in the decision of female adolescents to apply to a job. The analysis is based on a randomized controlled trial conducted with 336 students in four secondary schools in Madagascar in 2018. Students were randomly assigned to watch either a female role model, a male role model, or a placebo video. The role model videos depict a person from a similar background to that of the students who succeeded in working in their desired occupation after a long journey with a lot of obstacles. After video exposure, we measured students’ aspirations and beliefs as well as competitive preferences and performance with a lab-in-the-field experiment. At the end of the experiment, we informed the students that they could apply to a position for an assistant or a coordinator in the research project of one of the principal investigator one week after our visit. We find that the female role model video has a positive effect on female’s as well as male’s decision to apply to one of the positions. Female students apply more often to the coordinator position in the male role model video compared to the control treatment, which almost closes the gender gap in applications to that position. We also find a positive treatment effect of the female role model video on female’s aspirations and self-beliefs. All in all, the papers presented in this thesis provide evidence that aspirations are correlated with investments, yet not always in the hypothesized direction. Further the studies provide evidence that aspirations and investments can be shaped with exposure to role models in videos. While aspirations seem to be the mechanism for individual outcomes; for cooperation outcomes the mechanism seems to be a change in beliefs in the behavior of others.