Adverse Selection into Competition: Evidence from a Large-scale Field Experiment in Tanzania

54 Pages Posted: 21 Sep 2020

See all articles by Ingvild Almås

Ingvild Almås

Stockholm University - Institute for International Economic Studies (IIES)

Lars Ivar Oppedal Berge

Norwegian School of Economics (NHH)

Kjetil Bjorvatn

Norwegian School of Economics and Business Administration; CESifo (Center for Economic Studies and Ifo Institute)

Vincent Somville

Norwegian School of Economics (NHH)

Bertil Tungodden

Norwegian School of Economics (NHH) - Department of Economics

Date Written: September 18, 2020

Abstract

An influential literature has shown that women are less willing to compete than men, and the gender gap in competition may contribute to explaining gender differences in educational choices and labor market outcomes. This study reports from a large-scale randomized controlled trial of a women empowerment program in Tanzania targeting young women at the end of secondary school. Combining the randomized controlled trial, a lab-in-the-field experiment and survey data, we provide evidence suggesting that the program caused adverse selection into competition: low performing women competed more, while there was no effect on the high performers. We provide a theoretical framework to illustrate an adverse selection mechanism that may contribute to explain why the program only affected the willingness to compete among low performers. Our results emphasize the importance of understanding sorting mechanisms and heterogeneous treatment effects in the design of policies and programs.

JEL Classification: C9, I24, J16

Suggested Citation

Almås, Ingvild and Berge, Lars Ivar Oppedal and Bjorvatn, Kjetil and Somville, Vincent and Tungodden, Bertil, Adverse Selection into Competition: Evidence from a Large-scale Field Experiment in Tanzania (September 18, 2020). NHH Dept. of Economics Discussion Paper No. 19/2020, Available at SSRN: https://ssrn.com/abstract=3696242 or http://dx.doi.org/10.2139/ssrn.3696242

Ingvild Almås

Stockholm University - Institute for International Economic Studies (IIES) ( email )

Stockholm, SE-10691
Sweden

Lars Ivar Oppedal Berge

Norwegian School of Economics (NHH) ( email )

Helleveien 30
Bergen, NO-5045
Norway

Kjetil Bjorvatn

Norwegian School of Economics and Business Administration ( email )

Helleveien 30
N-5035 Bergen
Norway
47-55 9595 85 (Phone)
47-55 9595 43 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Vincent Somville (Contact Author)

Norwegian School of Economics (NHH) ( email )

Helleveien 30
Bergen, NO-5045
Norway

Bertil Tungodden

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway

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