Why Firms Don't Train Workers and What That Costs Developing Economies ft. Nicholas Swanson EP 12

When we look at informal labor markets in the Global South, it is easy to attribute inefficiencies to a lack of financial literacy or unavoidable cultural norms. But what if these behaviors are actually highly rational responses to broken economic systems? In this episode of Beating Sisyphus, hosts Thomas Riveros and Lourdes Casanova sit down with Dr. Nicholas Swanson, Assistant Professor of Economics at Cornell University. Nicholas shares his journey from working in metals and mining investment banking at Evercore and HSBC to running randomized controlled trials (RCTs) in Sub-Saharan Africa. We dive deep into the behavioral economics of poverty, exploring Nicholas’s fascinating fieldwork. Discover why agricultural firms rationally "hoard" knowledge, why farmers face a "hungry season" due to cognitive memory failures rather than pure present bias, and how the social pressure to hire family members acts as a hidden "kinship tax" on business owners in Zambia .🎙️ About the Guest: Nicholas Swanson is an Assistant Professor of Economics at Cornell University. He earned his Ph.D. in Economics from UC Berkeley and focuses his research on development, labor, and behavioral economics, particularly in Sub-Saharan Africa.📌 Chapters / Timestamps:(00:00) - Introduction to Beating Sisyphus & Nicholas Swanson(01:32) - From Investment Banking to RCTs: The Impact of Poor Economics(06:01) - Designing Better Experiments & Understanding External Validity(09:32) - Optimism for Africa: Tech in Rwanda and the Return of Commodities(11:11 )- The Under-Training Puzzle: Why firms in low-income countries don't train workers(22:20) - The "Hungry Season" in Zambia: Is it present bias or a memory failure?(33:24) - The Kinship Tax: Why the social pressure to hire family members hurts businesses(40:06) - Policy Takeaways: Why new technologies get blocked by power dynamics(43:26) - Closing Thoughts: Hopeful emerging markets (Burundi & Ethiopia)Beating Sisyphus is a production of the Cañizares Center for Emerging Markets in collaboration with the Cornell Emerging Markets Institute Club. We bring together leaders from across economics, technology, and policy to explore how innovation emerges under pressure.