Description:

Speakera: Aaron Wolf & Alison Zhao  

Title: Potential Over Pay: Career Incentives in India’s Youth Labor Market

Abstract: Understanding what appeals to job seekers is the first step to attracting and retaining the right talent for organizations. In this project we study the preferences of young job seekers in India, focusing on how they trade off immediate compensation with potential future opportunities. We report estimates from a pilot discrete choice experiment of the reservation wages for positions offering upward mobility compared to fixed-term roles. Our pilot results show that candidates are willing to accept entry-level wages 1,511 Rs lower per month for roles promising promotion potential—a discount that rises to 3,964 Rs when such advancement is highly likely. Additionally, job seekers trade off lower current wages for future raises at a ratio of 1.1:1, increasing to 3.1:1 when the likelihood of a raise is high. Notably, women show heightened responsiveness to clear promotion and raise opportunities. These results suggest that transparent career incentives play a significant role in shaping workers’ preferred contracts and job choices.