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Working papers

Contents

She Works Hard for the Money: Debt Burden and Labour Supply in India

—A. Natal, C. J. Nordman.

DIAL Working Paper No. DT/2025-01, (2025).
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For over 40 years, labour supply has been at the heart of empirical microeconomics, but few studies have examined the impact of household debt burdens on labour supply, and almost none on countries of the Global South. This research fills this gap by examining how debt burden – measured by the debt service ratio – affects labour supply, in particular hours worked, among more than 3200 individuals in rural Tamil Nadu, India, between 2016-17 and 2020-21. Using a Heckman correction with lagged debt ratios and fixed effects to account for unobserved factors and limit reverse causality, the study highlights a striking result: women increase their labour supply to repay household debt, regardless of which household member incurred it. Our results challenge the commonly held view in the South that women’s work is synonymous with empowerment, suggesting that it may be the result of economic pressures rather than a move towards autonomy.

Cite as:
Natal, A., & Nordman, C. J. (2025). She Works Hard for the Money: Debt Burden and Labour Supply in India (Working Paper No. DT/2025-01). DIAL: Paris.


The Determinants of Trust: Evidence from Rural South India

—A. Hilger, C. J. Nordman.

IZA Discussion Paper No. 13150, (2020).
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Trust and participation in social networks are inherently interrelated. We make use of India’s demonetization policy, an unexpected and unforeseeable exogenous variation, to causally identify the effect of social networks in determining trust. We use first-hand quantitative and qualitative data from rural South India and control for individual characteristics (personality traits, cognitive ability) that could influence network formation and trust, finding that social interactions have a significant effect on trust among men, as well as across castes. Among lower castes, who live in homogeneous neighborhoods and relied on neighbors and employers to cope, extending one’s network lowers trust in neighbors. Among middle castes, who live in more heterogeneous neighborhoods and relied predominantly on other caste members, a larger network size leads to greater trust placed in kin among employees but lesser in neighbors. This paper thus shows that social interactions can foster trust and highlights the importance of clearly defining in- and out-groups in trust measures within highly segregated societies.

Cite as:
Hilger, A., & Nordman, C. J. (2020). The Determinants of Trust: Evidence from Rural South India (Working Paper No. 13150). IZA: Bonn.