How Important are Matching Frictions in the Labor Market? Experimental & Non-Experimental Evidence From a Large Indian Firm
66 Pages Posted: 8 May 2023
Abstract
This paper provides evidence of matching frictions in the Indian labor market. Using several methods to elicit genuine preferences of job-seekers over jobs, we show that: (a) there is substantial variation in job-seekers’ preferences over the same jobs and (b) placement officers, responsible for placing job-seekers in jobs, have poor knowledge of it. Providing placement offers with this information improves matching of job-seekers to interviews, even after taking into account redistribution of jobs across job-seekers. Treated job-seekers get more preferred jobs and retain them in the short run (three months), but not in the longer run (six months).
Keywords: Matching, Labor, Job-search, Recruitment, Experiment
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