How Important are Matching Frictions in the Labor Market? Experimental & Non-Experimental Evidence From a Large Indian Firm

66 Pages Posted: 8 May 2023

See all articles by Gaurav Chiplunkar

Gaurav Chiplunkar

University of Virginia - Darden School of Business

Abhijit V. Banerjee

Massachusetts Institute of Technology (MIT) - Department of Economics

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

Suggested Citation

Chiplunkar, Gaurav and Banerjee, Abhijit V., How Important are Matching Frictions in the Labor Market? Experimental & Non-Experimental Evidence From a Large Indian Firm. Available at SSRN: https://ssrn.com/abstract=4441896 or http://dx.doi.org/10.2139/ssrn.4441896

Gaurav Chiplunkar (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Abhijit V. Banerjee

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
Room E52-252D
Cambridge, MA 02142
United States
617-253-8855 (Phone)
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