Development Economics
Karlan's research focuses on the areas of development economics, behavioral economics and international development policy. He has studied microeconomic issues of financial decision-making, specifically employing randomized controlled trials (RCTs) to examine what works and what does not and why with respect to interventions and businesses intended to address problems in society. Internationally, he focuses on microfinance, and domestically he focuses on voting, charitable giving, and commitment contracts.
In microfinance, Karlan has studied the following topics: interest rate policy, credit evaluation and scoring policies, entrepreneurship training, group versus individual liability, savings product design, credit with education, and impact from increased access to credit and savings.[12] His work on savings and health typically uses insights from psychology and behavioral economics to design and test specialized products.[13]
Karlan has published extensively "Graduation" programs, a set of anti-poverty programs which provide a multifaceted, complementary set of interventions including a productive asset, training, coaching, access to savings, consumption support and in some cases mental health treatment.[14] A six-country study found that these programs cause lasting progress out of poverty for the very poor.[15]
In 2007, Karlan received the Presidential Early Career Award for Scientists and Engineers[16][17] and in 2008 he received the Alfred P. Sloan Research Fellowship.[18] He has consulted for the World Bank, the Asian Development Bank, FINCA International, Oxfam USA, and the Guatemalan government.[13] Karlan is also co-Founder of StickK, a company that manages incentive-based employee wellness programs and public campaigns for health living, and enables users to make commitment contracts in order to reach their personal goals.[19] He is also the co-author of the economics book More Than Good Intentions published by Dutton Press released in April 2011.[20] Karlan is also a member of the Finance research programme at the International Growth Centre, a research centre based jointly at The London School of Economics and Political Science and the University of Oxford, which brings academics and policy-makers together.[citation needed]
Charity Efficacy and Effective Altruism
Karlan's research intersects with effective altruism, and many of the development interventions recommended by effective altruist organizations such as GiveWell and The Life You Can Save are based on studies conducted by Innovations for Poverty Action.[21] Karlan has studied and written about how to increase the quality and quantity of giving. His research has shown that nonprofits with high overhead rates are extremely rare,[22] that cost-effectiveness information can increase donations[23] and that a match from a high profile organization (in this case, The Bill & Melinda Gates Foundation) can increase donations.[24]
Karlan co-founded ImpactMatters with Elijah Goldberg in 2015. ImpactMatters produced estimates of impact and corresponding ratings, and was acquired by Charity Navigator in 2020.[25]