Low-cost Management Training in the Bangladeshi Garment Sector - PowerPoint PPT Presentation

Low-cost Management Training in the Bangladeshi Garment Sector Vanessa Schreiber ∗ , Atonu Rabbani † , and Christopher Woodruff ∗ ∗ University of Oxford † University of Dhaka EMC 13.12.2019

Introduction Context and Design Empirical specification Main findings Conclusion Research focus • Key research question: How can you improve both productivity and worker well-being in large firms in developing countries in the most cost-effective way? • Approach: Analysis of a large-scale randomized controlled trial consisting of a low-cost management training program (with HR and productivity modules) in 25 garment factories in Bangladesh • Motivation: Variation in management practices to explain productivity differences, but little evidence on cheap and scalable management training interventions • Expensive individualized consulting (Bloom et al., 2013) • Cheaper group-based consulting (Iacovone et al., 2018)

Introduction Context and Design Empirical specification Main findings Conclusion Differences to existing programs Particular characteristics of training 1. Designed from perspective of making workers better off ("Benefits for Business and Workers") and whether improvements paid for themselves 2. Focused on narrow set of practices • Generic as opposed to firm-specific • Complementary 3. Aimed at measuring practices and adoption in detail

Introduction Context and Design Empirical specification Main findings Conclusion Intervention

Introduction Context and Design Empirical specification Main findings Conclusion Main findings • Positive effects of training program on worker and firm outcomes, driven by decrease in exit rates; evidence of spillover effects of HR-related practices to control lines on same floor as treatment lines • Practices aimed at changing interaction of people on production floor seemed to have worked better than production-related technical practices – possibly due to lower degree of required cross-departmental communication • Effects on firm outcomes vanishing after last training, possibly due to discontinuation of certain practices; some practices must have been kept as worker outcomes still significant

Introduction Context and Design Empirical specification Main findings Conclusion Randomisation • Randomisation of treatment at the line level • Procedure • Factories nominate three potential treatment lines • Randomly assign to one treatment and two control lines • Drop control lines if adjacent to treatment lines

Introduction Context and Design Empirical specification Main findings Conclusion Outcome measures • Worker outcomes Anderson (2008) index of grouped survey questions about adoption of specific practices and approaches • Indeces: HR, PR, Wellbeing and Communication • Data: Survey data with line operators, supervisors/line chiefs and managers (at three points in time) • Firm outcomes Kling et al. (2007) index of factory data; adjusted for multiple outcomes (Benjamini et al., 2006) • Indeces: – HR-related with exit, turnover, absenteeism and promotion rates – PR-related with efficiency and alteration rates • Data: Salary and production data

Introduction Context and Design Empirical specification Main findings Conclusion Empirical specification for worker outcomes Y l , f , t = β 0 + β 1 Endline l , f , t + β 2 Midline l , f , t XTreated l , f , t + β 3 Endline l , f , t XTreated l , f , t + δ f + ǫ l , f , t • l indexes line, f factory and t survey time • Y l , f , t : Index associated with set of practices which aggregates survey responses • Treated l , f , t : Time-invariant treatment indicator • Midline l , f , t resp. Endline l , f , t : Indicator for survey wave • δ f : Factory-fixed effects • ǫ l , f , t : Error term clustered at the line-level

Introduction Context and Design Empirical specification Main findings Conclusion Empirical specification for firm outcomes Y l , f , t = β 0 + β 1 Base l , f + β 2 Post 2 l , f + β 3 Post 3 l , f + β 4 Post 4 l , f + β 5 Post 1 XTreated l , f + β 6 Post 2 XTreated l , f + β 7 Post 3 XTreated l , f + β 7 Post 4 XTreated l , f + δ f + ǫ l , f , t

Introduction Context and Design Empirical specification Main findings Conclusion Worker outcomes: Main results (line operators only) (1) (2) (3) (4) HR PR Wellbeing Communication 0.53 ∗∗ 1.07 ∗∗∗ MidlineXTreated 0.20 -0.23 (0.26) (0.29) (0.31) (0.24) 0.41 ∗ 1.13 ∗∗∗ EndlineXTreated 0.12 0.23 (0.27) (0.29) (0.24) (0.28) Observations 126 126 126 128 Line clusters 63 63 63 65 • Practices aimed at changing interaction of people better implemented than practices aimed at changing technical aspects and production processes itself • Possibly due to lower degree of cross-departmental communication required for implementation

Introduction Context and Design Empirical specification Main findings Conclusion Worker outcomes: Index components

Introduction Context and Design Empirical specification Main findings Conclusion Firm outcomes: Main results Index HR Variables PR Variables (1) (2) (3) (4) (5) (6) (7) (8) HR PR Exit Turnover Absenteeism Promotion Efficiency Alteration Rate 0.44 ∗ -0.030 ∗ TreatedXPost1 0.11 -0.076 -0.0022 0.012 0.037 0.00011 (0.24) (0.18) (0.061) (0.017) (0.0076) (0.014) (0.023) (0.010) 0.44 ∗ -0.16 ∗∗ TreatedXPost2 0.028 -0.035 0.00067 0.0021 0.058 0.0060 (0.22) (0.14) (0.068) (0.022) (0.0060) (0.017) (0.037) (0.0092) TreatedXPost3 -0.044 -0.023 0.18 0.00087 0.00030 0.029 0.021 0.00069 (0.41) (0.17) (0.17) (0.016) (0.0081) (0.022) (0.042) (0.0096) TreatedXPost4 -0.13 0.017 0.00035 0.012 0.0013 -0.0055 0.019 0.00022 (0.16) (0.13) (0.039) (0.014) (0.0058) (0.0053) (0.026) (0.0082) Observations 289 2069 289 289 246 289 846 2068 Line clusters 51 68 51 51 43 51 35 68 q: TXP1=0 0.50 0.45 0.79 0.72 0.30 0.98 q: TXP2=0 0.088 0.20 0.84 0.84 0.35 0.35 q: TXP3=0 1 1 1 1 1 1 q: TXP4=0 1 1 1 1 1 1 • Significant positive effect after 1st and 2nd training module on HR-related outcomes ; vanishing after 3rd and 4th training • Effect driven by sharp decrease in exit rates

Introduction Context and Design Empirical specification Main findings Conclusion Measuring spillover effects 1. Results after first and second module understated due to spillover effects to control lines? 2. Disappearance of effects after third and fourth modules due to treatment lines stop doing practices or by control lines adopting new practices (spillover effects)?

Introduction Context and Design Empirical specification Main findings Conclusion Measuring spillover effects - Illustration

Introduction Context and Design Empirical specification Main findings Conclusion Worker outcomes: Spillover results (line operators only) HR Wellbeing Communication (1) (2) (3) (4) (5) (6) (7) (8) (9) All Same Diff All Same Diff All Same Diff 0.63 ∗∗∗ 0.82 ∗∗∗ 0.98 ∗∗∗ 1.23 ∗∗∗ 0.86 ∗∗∗ MidlineXTreated 0.25 -0.26 -0.33 -0.24 (0.24) (0.30) (0.27) (0.29) (0.33) (0.35) (0.23) (0.34) (0.26) 0.60 ∗∗ 0.47 ∗ 0.98 ∗∗∗ 0.78 ∗ 1.07 ∗∗∗ EndlineXTreated 0.28 -0.47 0.46 0.47 (0.28) (0.42) (0.30) (0.24) (0.33) (0.30) (0.27) (0.40) (0.30) 1.22 ∗∗∗ 1.47 ∗∗∗ 1.10 ∗∗∗ MidlineXAdjacent 0.20 -0.18 0.39 0.022 -0.034 0.030 (0.24) (0.32) (0.27) (0.29) (0.32) (0.35) (0.26) (0.38) (0.28) 0.46 ∗ 0.52 ∗∗ 0.61 ∗∗ EndlineXAdjacent 0.13 -0.62 0.31 0.32 0.30 0.31 (0.25) (0.40) (0.25) (0.27) (0.35) (0.33) (0.26) (0.43) (0.26) Observations 209 158 186 209 158 186 209 158 186 Line clusters 106 80 94 106 80 94 106 80 94 • Spillovers to control lines on the same floor only for HR practices • Spillovers to adjacent lines for Communication and HR practices • Possibly because HR practices by nature floor-wide and easy to deploy

Introduction Context and Design Empirical specification Main findings Conclusion Firm outcomes: Spillover results (HR Index only) All Diff Adj Diff(floor) Factory 0.45 ∗ 0.18 ∗ Post1XTreated 0.21 0.076 -0.065 (0.21) (0.27) (0.11) (0.098) (0.096) Post2XTreated 0.45 0.35 0.42 ∗ 0.35 ∗ 0.51 ∗∗∗ (0.44) (0.27) (0.24) (0.20) (0.18) 0.66 ∗∗ Post3XTreated 0.40 -0.016 0.43 0.32 (0.49) (0.44) (0.35) (0.29) (0.31) Post4XTreated -0.20 -0.15 -0.035 0.11 0.078 (0.23) (0.20) (0.18) (0.096) (0.094) Post1XAdjacent -0.10 (0.13) Post2XAdjacent 0.29 (0.27) Post3XAdjacent 0.34 (0.36) 0.21 ∗∗ Post4XAdjacent (0.090) Observations 200 233 820 820 1502 Line clusters 35 41 146 146 275

Introduction Context and Design Empirical specification Main findings Conclusion Conclusion • Generic and group-based format works - Positive and significant effects on worker outcomes (HR, Wellbeing and Communication index), and firm outcomes (HR-related index) —> Interaction of people easier to change than production-related technical aspects? • Spillover effects only for HR variables; effects in firm data vanishing after 3rd and 4th training modules —> Well-defined practices easier to spread across lines than practices requiring high degree of soft skills?

Introduction Context and Design Empirical specification Main findings Conclusion Thank you!

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Survey index components