In developing countries, financial transfers within kin and social networks are frequent. We test whether such redistributive arrangements dampen the incentive to work and accumulate earnings using a field experiment with full-time piece-rate factory workers in Côte d’Ivoire. We offer workers a 9-month blocked savings account, into which they can deposit incremental earnings increases. This leaves average cash-on-hand unchanged, while potentially reducing the effective "social tax'' on income gains--enabling us to isolate substitution effects on effort. We further vary whether the existence of the accounts is private or would become known to workers' network, inducing variation in the likelihood of transfer requests against income gains. When the accounts are private, account demand is substantively higher (60% vs. 14%) and workers increase labor supply and effort--resulting in 9% higher attendance and 14.5% higher output and earnings. Our estimates imply a 23% social tax rate on earned income. Our findings suggest that the potential welfare benefits of redistributive arrangements may come at an efficiency cost of lower aggregate output and earnings.
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