Impacts of Improving the Management of Hostels for Migrant Workers

Indian garment companies often hire rural women, and their relocation from villages to cities is a significant transition for the workers and the company.

  • Through randomized controlled trial covering 7,500+ residents in 80 hostels, we studied how housing quality affects the subjective well-being and workplace outcomes of migrant garment workers.
  • There were objective improvements in safety, cleanliness, and congestion, and reduction in subjective well being and mental health of those workers whose expectations regarding the hostel takeover were set high before the takeover.

Boston College | University of Michigan | Shahi Exports | Janodaya | Department for International Development, UK Government | Private Enterprise Development in Low-Income Countries (PEDL) | Boston College | University of Michigan







As people migrate from rural to urban areas in 'search of a better life', it is crucial to understand what role firms can play in ensuring that this migration experience is as pleasant as possible for their workers.

  1. There is widespread concern around the living conditions of migrant workers, how important they are in determining migrants' decision to stay, and what are the benefits to the firm from investing in housing.
  2. Through randomized controlled trial, we looked at the takeover of 80 Shahi hostels of 19 Shahi factories, by an experienced local NGO - Janodaya.
  3. The main question we tried to answer - how do living conditions affect worker wellbeing and work outcomes?
  4. The changes promised and delivered by the NGO partner included improved safety and security, more freedom of movement, cleanliness, representation and voice for grivenaces, and better access to trained caretakers.
  5. While there were objective improvements in the hostel facilities, the subjective wellbeing of hostel residents who had been living in the hostels prior to the takeover decreased.
  6. We think this reduction in subjective well-being is due to higher expectations set before the takeover, as the subjective well-being of new joiners (those who came after the NGO takeover in phase 1 hostels, but before phase 2 began) showed an improvement.

Given the obstacles faced by migrants to assimilate life in cities, it becomes crucial to understand the role firms can play in ensuring they are happy with their living conditions.


We divided the hostel takeover into two phases. In phase 1, hostels of 10 factory units were randomly allocated to 'treatment' (take over), while those of the other 9 units were assigned 'control' (delayed takeover i.e. takeover in phase two which was around five months after phase 1). This resulted in around 50 hostels becoming a part of the treatment, and 30 becoming a part of control.. To understand the imapct of the takeover, we looked at administrative data, extensive worker surveys, and independent ennumerator evaluations. We also looked at a sample of over 200 new joiners i.e. workers who joined after the takeover during phase 1, but before phase 2 began, to see how important setting of expectations is in cases like this. In theory these new joiners received the same treatment, the only distinguishing factor beingthe difference in expectation setting. Over 2,200 workers were randomly chosen to be a part of our worker surveys.

Data Insights

We found that:

  1. The subjective well-being of workers whose hostels were transferred to the NGO declined, possibly due to higher expectations set prior to the takeover.
  2. There was an improvement in the suvjective well-being of new joiners i.e. workers who joined after the takeover, and hence weren't informed of the takeover for them to set prior expectations.
  3. This is not to say that conditions in the hostels did not improve. Independent ennumerator evaluations revealed obejctive improvements in cleanliness, living conditions, and other aspects of living for the workers. There were however some promises like improved access to nutritional food which weren't delivered on.
  4. This highlights the need for firms to communciate better with their workers so as to set realistic expectations, and then ensure that the changes promised are implemented effectively.
  5. This makes business sense as well, considering Shahi loses 80-90% of its workforce every year and incurs around 25 million dollars as replacement costs.

Media Mentions

Good Business Lab: New foundation promotes soft skills for workers in garment sector

By The Economic Times / 31-Mar-2018

"Our goal with starting a foundation is to study interventions that have the potential to impact worker welfare while also promoting the growth of firms," Adhvaryu said in a statement. "We incubate new ideas and serve as a platform to disseminate findings from our research."

Investing in Worker Welfare Increases Welfare and Firm Productivity: Good Business Lab

By BusinessWorld / 11-Jan-2018

In an exclusive interview with BW Businessworld, the three co-founders of Good Business Lab, Achyuta Adhvaryu: Assistant Professor of Business Economics and Public Policy, University of Michigan, Anant Nyshadham: Assistant Professor of Economics, Boston College and Anant Ahuja: Head of Organizational Development, Shahi Exports discuss the research of Good Business Lab and why it is wise for firms to invest in its workers’ welfare.

New foundation promotes soft skills for workers in India

By Michigan News / 21-Mar-2018

Training workers with soft skills like time and stress management, problem solving, communication and teamwork can have big impacts on the productivity of workers and company profits, says a University of Michigan researcher Achyuta Adhvaryu, assistant professor of business economics and public policy at Michigan's Ross School of Business.