Emily Breza, Supreet Kaur, Nandita Krishnaswamy, 12 October 2019

Enforcing collective action through social norms and social sanctions can be particularly relevant in poor countries, where local social networks are often key in risk sharing and information diffusion. This column uses two experimental exercises to test whether social norms shape aggregate labour supply in informal markets for casual daily agricultural labour in India. It finds that social norms help sustain wage floors, with workers taking jobs at wage cuts in private but rejecting them in public due to fear of sanctions.

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