Applied Micro Seminar : Every Tuesday
Time: 12:15 pm – 13:30 pm
Date: May, 19th
Room : 3001

Luisa CEFALA “The Economic Consequences of Knowledge Hoarding”

Abstract : 

Social learning is an important source of knowledge diffusion in low-income countries. However, the highly localized character of many labor markets could inhibit social learning by giving rise to incentives for individuals to hoard their knowledge. This paper studies the impact of knowledge hoarding on the diffusion of profitable skills and technologies in rural Burundi and measures its aggregate and distributional consequences for the village economy. In a field experiment covering 223 villages (labor markets), we encourage workers skilled in high-return agricultural technologies to share their knowledge with unskilled individuals. We randomize at the local labor market level whether the unskilled worker is a competitor (i.e., someone from the same labor market) and whether the training is about a technology with rivalrous rents (row planting, which commands a wage premium in the labor market). We first establish that knowledge hoarding indeed reduces social learning. When incumbents are matched with an individual from the same labor market, knowledge transmission occurs only 3% of the time, but this figure reaches 43% if the unskilled worker is not a competitor. In contrast, transmission of a technology with nonrivalrous rents (composting) is high regardless of the unskilled worker’s identity. Next, we show that knowledge hoarding creates winners and losers: By hoarding knowledge, incumbents earn 6% more, and the skilled equilibrium wage is 3% higher. In contrast, unskilled workers’ earnings and farm output are 7% and 20% lower, respectively. Overall, knowledge hoarding reduces technology adoption by over 20%, suggesting substantial yield losses. %The number of days in row-planting employment is 16% higher, and the share of row-planted fields increases by 27%, suggesting estimated yield gains of 9%. Finally, our results suggest that fear of social sanction is a mechanism that sustains knowledge hoarding among the incumbents, highlighting how social ties can foster social learning but also inhibit it when knowledge diffusion threatens incumbents’ rents.

Organizers:
Benoît SCHMUTZ (Pôle économie du CREST)
Clément MALGOUYRES (Pôle économie du CREST)

Sponsors:
CREST