How much can employers in low- and middle-income countries suppress wages below marginal productivity? Using plant and customs data from Colombia, we exploit predetermined variation across plants in sales export destinations combined with variation in exchange rates to generate plant-specific shocks to marginal revenue productivity and labor demand. We estimate a firm-level labor supply elasticity of around 2.5, implying that workers produce about 40% more than their wage level. This result is driven by plants that account for a large share of local employment, consistent with an oligopsonistic labor market model.

This paper studies the effect of deposit insurance on depositor behavior. Our theoretical framework integrates insights from public and financial economics and predicts that (1) deposit insurance induces bunching at the threshold in the deposit distribution and (2) an increase in the insurance threshold promotes deposit growth, particularly higher for individuals bunching at the initial limit. We exploit a large and unexpected increase in the Colombian insurance together with monthly depositor-level records from a major bank to test these predictions. We validate the existence of bunching in deposits and quantify the heterogeneous effect of deposit insurance on individual deposit growth. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.

We conduct a randomized experiment involving 7,063 late-paying clients of a large Colombian bank to compare the effects of text messages that leverage different behavioral motives on loan delinquency. Our results show that receiving a message decreases the likelihood of borrowers being late by 4 percent. The effects are more pronounced and persistent when messages leverage social norms. Using machine learning tools, we find that the effects are higher among borrowers with higher credit scores and unsecured loans. A second experiment shows that this type of message is ineffective in preventing on-time borrowers from falling into loan delinquency.

What is the most efficient way of designing incentives in an organization? Over the past five decades, agency theory has provided various answers to this crucial question. This line of research suggests that, depending on the organizational context, the optimal approach to providing incentives may involve either relying on collective compensations or, conversely, employing relative performance evaluations. In the first scenario, cooperation among agents is the key aspect of the organization. In the second, competition prevails. This paper provides a comprehensive overview of this extensive literature with the aim of understanding the conditions under which one or the other type of incentive schemes is more desirable for the principal of the organization. To this end, we use a flexible and versatile model capable of addressing a wide range of scenarios characterized by different technologies, information constraints, and behavioral norms. ( JEL C70, D62, D82, D83, D86, L12, M54)