Kinship Taxation as a Constraint to Microenterprise Growth: Experimental Evidence from Kenya (Revise and resubmit, AER)
Developing country entrepreneurs face family pressure to share income. This pressure, a kinship tax, can distort capital allocations. I combine evidence from a lab experiment-which allows me to estimate an individual-level sufficient statistic for the distortion-with data I collected on a sample of Kenyan entrepreneurs, to quantify the importance of the tax. My data reveal high kinship tax rates for a third of entrepreneurs in my sample. My quantitative analysis makes use of a simple structural model of input allocation fitted to my data, and implies that removing distortions from kinship taxation would increase total factor productivity by 26%, and increase the share of workers in firms with five or more employees from 9% to 56%. These effects are substantially larger than those coming from credit market distortions, which I estimate using a cash transfer RCT. My analysis also implies strong complementarities between kinship taxation and credit constraints.
Work in progress
Kinship Taxation and Worker Effort: Experimental Evidence from the DRC
Does pressure from relatives to redistribute income reduce labor incentives? I use data from a modern agricultural firm in Lubumbashi, DR Congo, to test this effect. By directly estimating the income-sharing pressure workers face using a lab experiment, I measure the size of this distortion and describe how it correlates with worker ability and position in the firm. Using data on worker productivity, combined with results from the lab experiment, I estimate the cost of kinship taxation in terms of lost output for the firm, and evaluate policies aimed at attenuating these costs. Varying the observability of output and earnings separately allows me to measure the effect of social sharing pressure on effort separately from other effects of social comparison.
In-marriage and Income: Cousin Marriage in the US (with Arkadev Ghosh and Sam Hwang)
Contemporary societies where marriage amongst kin is common have lower incomes, more violence and are less democratic. Marriage practices themselves, by sustaining tightly knit clan-like structures, may impede integration, societal trust, and political participation. We use 19th-century state-level bans on cousin marriage to study the causal effect of cousin marriage on economic and political outcomes. We show that these bans were successful in reducing rates of in-marriage, and that affected descendents have higher incomes and more education in the 1940 Census.
Census Linking: A Bounds Approach (with Hu Fu, Arkadev Ghosh and Sam Hwang)
Linking historical data at scale typically requires substantial human effort and subjective individual judgement on the quality of links. We propose a method to identify bounds on statistics of interest that requires minimal assumptions. This method is complementary to state-of-the-art approaches to linking census records. We implement our method to compute an upper and lower bound on inter-state migration rates between the 1850 and 1860 US Census. We ﬁnd a lower bound that is higher than existing estimates of inter-state migration in the literature. We discuss why our estimate is larger than past estimates, that are based on smaller and more selected samples.
Selection and Impact of Modern Industrial Employment: Field Experimental Evidence from a Chinese Factory in Tanzania (with David Yang and Noam Yuchtman)