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Changing behavior with social and financial incentives

Changing behavior with social and financial incentives. An experiment called babajob. Sean Blagsvedt CEO, babajob sean@babajob.com. 45 million bracelets. The social opportunities of this conference. Prof Anirudh Krishna Duke University . How do people come to be poor?

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Changing behavior with social and financial incentives

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  1. Changing behavior with social and financial incentives An experiment called babajob Sean Blagsvedt CEO, babajob sean@babajob.com

  2. 45 million bracelets

  3. The social opportunitiesof this conference

  4. Prof Anirudh KrishnaDuke University • How do people come to be poor? • How do people escape from poverty? More: www.pubpol.duke.edu/krishna

  5. The Good News… More: www.pubpol.duke.edu/krishna N > 35,000 households (mostly villages)

  6. …The Whole Story More: www.pubpol.duke.edu/krishna N > 35,000 households (mostly villages)

  7. Findings! • HUGE flows in and out of poverty • Constant creation -> persistence, some exits • 1/3 of people not born poor • But why did changes occur? More: www.pubpol.duke.edu/krishna

  8. Reasons for descent • BAD HEALTH AND HIGH HEALTH CARE EXPENSES 59% in Rajasthan; 73% in W. Kenya; 88% in Gujarat; 77% in Uganda; 75% in Andhra; 67% in Peru; 41% in North Carolina • Other location-specific reasons: Social and customary expenses; high-interest debt; crop disease, land exhaustion, drought; job loss More: www.pubpol.duke.edu/krishna

  9. Reasons for poverty escape • Diversification of Income Sources: Agriculture and Informal Sector (70% Rajasthan, 73% W. Kenya, 79% Uganda, 71% Andhra, 69% Peru, 70% Gujarat) • OTHER REASONS (much less frequent) Jobs – in Government and Private Sector More: www.pubpol.duke.edu/krishna

  10. They got other jobs • How? They knew someone…. “Availability of an external contact, a friend or more often a relative already established in the city, was critical in (64% cases from Rajasthan) for a households’ successful break from poverty.” - 2003 Krishna “Escaping Poverty and Becoming Poor: Who Gains, Who Loses, and Why?”

  11. A quote… I am educated [to high school level] and eager to get a job in the city, but I have no way of knowing what jobs exist. I have no one in the city who can find out and tell me… I wish I had an uncle or a cousin in [the nearest city], who could help me, just as Gopi Singh’s brother-in-law helped him to find a job. - Pratap Singh, village Khatikhera, district Bhilwara, May 16, 2002.

  12. Many jobs are found through word of mouth. The Driver asks his friend if she knows any cooks. Employer needs a cook and asks her driver Driver tells Employer and Employer hires cook. His friend knows a cook and tells the driver.

  13. A Story of 2 Nannies Mary • Edu: 5th standard • Speaks only Kannada • Earns $20/month • Only knows people in slum Jeena • Edu: 5th standard • Speaks Kannada, Hindi • Earns $170/month • Has sister who works for a rich family

  14. Other job sites help high end workers – even connect to social networks

  15. 2011 2008 2001 90 minute commute distance

  16. But wait: Poor people don’t use computers And many don’t have phones

  17. How we digitize job seekers: 3 models • Do it Ourselves • Small teams into the slum – not scalable? • Radio/TV ad with phone-in number • Create business model for partners • iCafes, NGOs, Micro-Finance cos. • Charge seeker Rs 20 + Earn Rs 200 when hired

  18. Payment example 1: Employers Job Seekers Mentors NGO $16 MFI $5 babajob

  19. How we digitize job seekers: 3 models • Do it Ourselves • Small teams into the slum – not scalable? • Radio/TV ad with phone-in number • Create business model for partners • iCafes, NGOs, Micro-Finance cos. • Charge seeker Rs 20 + Earn Rs 200 when hired • Via Social Networks • Orkut, babalife, FB users register job seekers • Mentors + connectors paid

  20. My homepage

  21. Take-aways • Changing human behavior through: • Financial incentives – mobile top-ups for 3bn people • Social incentives – how do their friends see their action? • Creating market efficiency for the poor • Aggregate data with websites • Connect to poor w/ mobiles + on-the-ground networks (kiva.org)

  22. Thanks • Sean Blagsvedt • Sean@babajob.com

  23. 1. Sean starts out as a simple babalife user 2. Sean adds friends on babalife or adds app on orkut/facebook 3. Sean needs to hire someone and pays babajob Rs 599 ($16) to see mobile #s or post a job 4. Sean searches and later clicks ‘I hired Selvi’. 5. We see that Kumari is the connector between Sean and Selvi. Earns Rs 100. 6. Kumari is also the mentor who registered Selvi on babajob.com. Earns another Rs 200 Payment example 2: Employer Employee Connector $16 Mentor $2.50 $5 babajob

  24. Stages of Progress (Rajasthan) Poor Not Poor Rich More: www.pubpol.duke.edu/krishna

  25. Babajob payment example # 2 Employer Employee $16 Connector Connector Mentor NGO $2 $2 $5 babajob

  26. Babajob summary • Beta-launched Sept 2007. Bangalore-only • 10,500 registered users • 4500 active job seekers • ~150 placements + paid employers • India-wide launch + social network launch – late April

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