APPLIED MICRO: Absent but Not Idle: Shocks to Daily Labor Supply and Demand for Flexible Work; Professor Suanna Oh (Paris School of Economics)

Abstract

High absenteeism and excess labor supply co-exist in labor markets across developing countries, posing a challenge to both firms and workers. This paper explores whether this concurrence can be explained by workers requiring flexible absences, stemming from frequent, unpredictable shocks to daily labor supply. Using an incentivized-choice experiment with 605 Indian workers, we measure demand for different types of scheduling flexibility and examine underlying motivations, including the role of social obligations---such as attending festivals, funerals, or helping neighbors. We also document caste-based variation in these preferences, rooted in the social structure of rural India. Finally, we evaluate the causal impact of offering flexibility on contract compliance, attendance, and productivity. Our findings provide insights into how workers' need for flexibility shapes labor supply patterns in casual labor markets.