Understanding the Impact of Offering Loans on Forced Labor

Abstract

Micro-contractors (MCs) are the first point of contact for workers on a construction site and play a major role in determining their working conditions. However, MCs themselves also face a host of challenges in their daily operations, such as limited access to low-cost working capital. We randomize MCs into an experimental group that is given access to low-cost loans and study the impact of loan access for MCs on forced labor indicators of their workers. This trial is registered in the AEA RCT registry ( https://www.socialscienceregistry.org/trials/10185).