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

Abstract

We show that helping young job-seekers signal their skills to employers generates large and persistent improvements in their 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. In the short-run, both interventions have large positive effects on the probability of finding a formal job. 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, but the effects of the transport subsidy have dissipated. Gains are concentrated on individuals 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 earnings gains that are far greater than the cost of the intervention.

Job Search and Hiring with Two-sided Limited Information about Workseekers’ Skills

“…3 We build on this work by showing that both firms and workseekers face limited information about workseekers' skills. Our work is most similar to papers that study information frictions by simultaneously revealing information to both firms and workseekers about skill assessment results (Abebe et al, 2020a;Bassi and Nansamba, 2020) or evaluations from workseekers' past employers (Abel et al, 2020;Pallais, 2014). These papers show that information revelation changes workseekers' outcomes and interpret this as evidence of firm-side information frictions.…”

“…They also receive an email with a CV template, interview tips, and job search tips. 14 This differs from the design in Abebe et al (2020a), where treated workseekers receive both skill certification and job search counselling while control workseekers receive neither.…”

“…These search distortions can also lead to lower employment and lower wages conditional on employment. When both sides of the market receive credible information on workseekers' skills or past performance, these workseekers' outcomes in the labor market can improve (Abebe et al, 2020a;Abel, 2019;Bassi and Nansamba, 2020;Pallais, 2014). These information problems may be particularly important in settings where hiring is less formal and education provides less information about skills (Pritchett, 2013).…”

Food Consumption and Food Security during the COVID‐19 Pandemic in Addis Ababa

“…We see that job losses during the pandemic were high but mostly voluntary in nature where a household member him or herself terminated the contract (figure 3). Ethiopia's private sector is characterized by very high job turnover (Blattman and Dercon 2018; Abebe et al 2020; Söderbom, Shiferaw, and Alemu 2020). 12 Considering this turnover, it is not clear the pandemic has led to higher than usual unemployment rates in Addis Ababa 13…”

Labour turnover and workers' well-being in the Ethiopian manufacturing industry

“…While the cost varies across firms, labour turnover might have important economic consequences. The International Finance Corporation (IFC 2013) provides several examples of high costs related to labour turnover, for instance, it is estimated that for Nalt Enterprise-a Vietnamese textile company-a 10 per cent reduction in labour turnover would translate into an 8.5 per cent saving of the total annual wage bill when assuming that it takes up to three months for a new textile worker to reach full productivity.4 In Ethiopia, search costs pose significant constraints for unemployed individuals in both time and monetary terms as there are few jobs available online, and many need to rely on social networks or travel to the city centre to find vacancies and to register and make formal applications(Abebe, Caria, et al 2020;Franklin 2017;Meyer 2018). …”