Paper: Mas & Pallais (2017)

"Valuing Alternative Work Arrangements", AER, 2017.
== Compared to WTP for Job Amenities Papers ==
* Add adjustment for inattention
* In a 'real' setting; its still a hypothetical choice experiment/conjoint analysis, but it is conducted during a job application process. This possibly makes it feel more real/closer to reality, but it is nonetheless a hypothetical choice experiment and they clearly state that answers have no impact on the actual job application process.
== Summary ==
=== 0. Introduction ===
Alternative work arrangements = flexible scheduling, WFH, and part-time work. Companies such as Walmart and Starbucks have moved away from irregular scheduling. Despite an active debate about how work should be organized, little is known about how workers valuate different arrangements.
This is difficult to measure due to unmeasured worker and firm characteristics, and estimates are often wrong-signed [relative to intuition? or relative to what?].And, in models of equalizing differences, compensating wage differentials are set to equate the utility of marginal workers in jobs with and without an amenity, which provides information only for those on the margin, not for all workers. E.g. they show that in CPS data 'more pleasant' work arrangements are correlated with higher wages—compensating differentials would suggest that it should decrease wages. 
This paper estimates worker WTP over alternative work arrangements from a hypothetical choice experiment, conducted as part of the application process for a national call center. [skipped experiment description, see section I]
Challenges that required addressing: 
# Applicants may be inattentive. They estimate the inattention rate and account for it in the econometric model to recover an unbiased WTP distribution.
# Is the sample representative? They argue: yes; (1) sample work arrangements similar to US economy, (2) weighting by observed worker characteristics doesn't alter estimates substantially, and (3) they field a comparable experiment in the representative UAS survey, and find very similar results.
Findings:
# Great majority of workers do not value scheduling flexibility, although there is a long right tail in the WTP distribution. 
# WFH is the most valued, with applicants on average willing to take 8% lower wages.
# Strong aversion to employer discretion in scheduling: on average willing to accept 20% lower wages to avoid this. Almost 40% of applicants would not take the job if it paid 25% more than a M-F 9-5 job.
Literature:
* Contributes to understanding of how heterogeneous preferences can explain the gender wage gap
* Closely related to Wiswall & Zafar (2018) and Eriksson & Kristensen (2014), which both use hypothetical job choice experiments to elicit WTP for job amenities. 
* Related in terms of field methodology to some papers, including the List et al 2015 one.
=== I. Experimental Design ===
Description of the experiment context: hiring for a call center where people would work to conduct telephone interviews for a labor market survey. Posted online ads for 68 large metro areas, linking workers to a professional website where they could apply for the job online. This is where the experiment was conducted, in the third step of the application. 
Applicants were shown two job descriptions for the same type of work, but differing in hourly wages and other job characteristics (e.g. WFH ability). Applicants were assured that these choices would not be looked at for hiring decisions (otherwise, they might answer strategically instead of truthfully).This to address the possible concern with this type of 'real' experiment, that workers might say they're okay with a less desirable arrangement in order to increase the probability that they get the job. [NOTE: THIS IS STILL A HYPOTHETICAL CHOICE EXPERIMENT, JUST EMBEDDED IN A REAL JOB APPLICATION. NOT CLEAR HOW THIS ADDRESSES THE REALISM CONCERN WITH HYPOTHETICAL CHOICE EXPERIMENTS.]IN A WAY, HOW DIFFERENT IS THIS THEN FROM A HYPOTHETICAL SURVEY EXPERIMENT? FOR THIS TO BE CREDIBLE AS A BETTER ESTIMATE, WE NEED TO THINK PARTICIPANTS TREATED THE TWO ALTERNATIVES AS PURELY HYPOTHETICAL. AT THIS POINT, MAYBE THE MAJOR DIFFERENCE BETWEEN THIS EXPERIMENT AND HYPOTHETICAL JOB SURVEY EXPERIMENTS IS THAT THE SAMPLE DIFFERS?
==== I.A. Job Description and Wages ====
All comparisons use the same baseline job description: 
They compare this baseline to five alternatives: (1) flexible schedule, (2) flexible number of hours, (3) WFH option, (4) combined flexible = 1, 2, and 3, and (5) employer discretion:Personally, I think I would infer from the description something about how 'chill' the employer is, or how much autonomy they would grant me to do this work. Even if I would want to come into the office every day, I would still prefer an employer that wouldn't require it. Says something about trust/taps into the dignity story?
==== I.B. Measuring Inattention ====
A challenge for experiments that vary information is accounting for people possibly not processing the information variation. They check this in three ways: (1) note that "This position is unavailable, please select the other position" at the bottom, (2) on the page after the job choice, ask if their choice had a fixed or alternative work schedule, and (3) measure the share of applicants who choose a dominated position when it paid $5 less.Not sure if I get this, they had some cases where the two alternatives were identical, but only varied on wage? (I don't think so then, why only ook at $5 difference?) They find that (1) 13.3% selected the unavailable option, (2) 13% answered the work schedule question incorrectly, and (3) 14.5% chose the dominated position when it paid 5$ less. If inattentive applicants made their choices randomly, this implies the share of inattentive applicants is double these percentages (26-29%).
Because estimates of quantiles and higher order moments of the WTP distribution are influenced by inattention, they explicitly incorporate inattention into the ML estimator. 
=== II. Conceptual and Econometric Framework ===
[don't understand from equation 1 onwards. What happens in the step in equation 1?]
[Note: from figure 1, it seems that this correction for inattention creates shares of people choosing an amenity at a given wage that fall outside of the 0-1 range, and that they don't force it back into this range.]
[Also looking at figure 1, i find it kinda surprising that there seems to be such a jump around 0. Is this is some possible way an artefact of the methods/setup used? Maybe its not surprising: is the interpretation that there is a large group of people ~indifferent, so that when the premium changes from positive to negative there's a large share of people who change their job choice? That would make sense actually.]
[There is a lot of non-monotonicity going on in figure 1?]
=== III. Willingness to Pay for Alternative Work Arrangements ===
==== A. Descriptive Statistics and Randomization Assessment ====
* Table 3 shows descriptives (on sex, age, education, and race) of their sample, and how it compares to overall descriptives of workers in the CPS. See table: their sample is a bit different that CPS phone workers.
* Table 4 shows a randomization assessment, and that demographics and wages are unrelated to treatment arm assignment.
==== B. Main Treatments ====
* Flexible scheduling: figure 1. About 60% chose the flexible alternative when the wages are the same—there is no wage premium—suggesting a large fraction of applicants place no value on flexible scheduling. [no a negative value?] Interpretation of the figures 1-5: at 0.5 on y-axis is the median worker in terms of WTP ($0.48/h), at 0.25 is the 75th percentile ($1.79/h), and at 0.75 is the 25th percentiel (-$0.82/h).
* Flexible Number of Hours: figure 2. Find slight negative WTP for flexible #hours, which they note as puzzling. They discuss in more detail. [why puzzling? if you fear not getting enough hours, flexible hours is a bad thing (paper gives more discussion)].
* Working from Home: figure 3. Generally positive WTP. ~20% chose not to WFH even when it comes at a cost.
* Combined Flexible Option: figure 4. WTP equals roughly the sum of WTP for the parts (three things above?)
* Employer Discretion: figure 5. Average worker willing to give up 20% of wages to avoid employer scheduling discretion. At equal wages, they only see 10% choosing discretion. Hence, find quite some aversion to arrangements where the employer has discretion over the work schedule. They unpack this a bit more (see table 7), finding people don't want to work irregular hours, or evening or weekends.
=== IV. Understanding America Study ===
To assess external validity of the experimental results, they ran a hypothetical choice experiment as part of the nationally representative Understanding America Study, focusing on three work amenities: flexible scheduling, WFH, and employer discretion.
I think they find largely similar WTP rates, but I kinda skimmed through this section, as it was conceptually not adding anything to lit review for the WTP for prosocial impact of your job idea.
=== V. Heterogeneity in Valuations ===
E.g. Paper: Wiswall & Zafar (2018) suggest that women value some amenities like flexibility more than men, and that this may explain (part of) gender wage gaps. Tables 10 and 11 show results by gender and with or without children under 4. They find that women are WTP twice as much as men for the ability to WFH or to avoid employer discretion. From the UAS—where they observe if ppl have children under 4—they find that women are WTP almost 38% of their wages to avoid a job with an irregular schedule (30% for women without children under 4), while kids don't make a difference in WTP for men.
However, because the difference in the prevalence of these amenities by gender is so small, the WTP differences cannot explain large gender pay gaps. 
=== IV. Discussion and Conclusion ===
== Footnotes ==