Anonymity or Distance? Job Search and Labour Market Exclusion in a Growing African City

87 Pages Posted: 17 Sep 2018

See all articles by Girum Tefera Abebe

Girum Tefera Abebe

Ethiopian Development Research Institute (EDRI)

Stefano Caria

University of Oxford

Marcel Fafchamps

Stanford University - Freeman Spogli Institute for International Studies

Paolo Falco

University of Copenhagen - Department of Economics

Simon Franklin

London School of Economics & Political Science (LSE) - London School of Economics

Simon Quinn

University of Oxford

Date Written: August 2018

Abstract

We show that helping young job-seekers to signal their skills to employers can generate large and persistent improvements in labour market outcomes. We do this by comparing an intervention that improves the ability to signal skills (the 'job application workshop') to a transport subsidy treatment designed to reduce the cost of job search. We find that in the short-run both interventions have large positive effects on the probability of finding formal jobs. The workshop also increases the probability of having a stable job with an open-ended contract. Four years later, the workshop significantly increases earnings, job satisfaction and employment duration, while the effects of the transport subsidy have dissipated. These gains are concentrated among groups who generally have worse labour market outcomes. Overall, our findings highlight that young people possess valuable skills that are unobservable to employers. Making these skills observable generates earning gains that are far greater than the cost of the intervention.

Keywords: job search, signaling, transport costs, urban growth, youth unemployment

JEL Classification: J22, J24, J61, J64, M53, O18

Suggested Citation

Abebe, Girum Tefera and Caria, Stefano and Fafchamps, Marcel and Falco, Paolo and Franklin, Simon and Quinn, Simon R., Anonymity or Distance? Job Search and Labour Market Exclusion in a Growing African City (August 2018). CEPR Discussion Paper No. DP13136, Available at SSRN: https://ssrn.com/abstract=3244508

Girum Tefera Abebe (Contact Author)

Ethiopian Development Research Institute (EDRI) ( email )

P.O. Box 2479
Addis Ababa
Ethiopia

Stefano Caria

University of Oxford

Mansfield Road
Oxford, Oxfordshire OX1 4AU
United Kingdom

Marcel Fafchamps

Stanford University - Freeman Spogli Institute for International Studies ( email )

Stanford, CA 94305
United States

Paolo Falco

University of Copenhagen - Department of Economics ( email )

KĂžbenhavn
Denmark
+4535334817 (Phone)

Simon Franklin

London School of Economics & Political Science (LSE) - London School of Economics ( email )

Simon R. Quinn

University of Oxford ( email )

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