University of Oxford
Principal Investigator: Marcel Fafchamps
Jobs are hard to find in Africa. Searching for jobs in African labour markets is expensive and time consuming. Job seekers, the young unemployed in particular, find it hard to be selected for the available positions. As a result, new employment opportunities are often not shared equally.
Many economies in sub-Saharan Africa have achieved high and sustained growth in the last decade. However, economic expansion has rarely been followed by marked improvements in the labour market outcomes of the poor. There is growing awareness that difficulties in finding jobs may be preventing economic growth from being truly pro-poor in urban settings. Policy makers have taken a keen interest in these issues, as evidenced in the targets for the development of job information services and job seeker assistance programmes set in 2010 by the Government of Ethiopia. However, insufficient descriptive data on the ways in which people look for jobs, and a lack of rigorous evaluation of job search assistance programmes in the sub-Saharan African context are limiting the use of these new policy tools.
We will run a novel Randomised Control Trial (RCT) to evaluate two different policies to improve the labour market outcomes of young prospective workers: (i) the provision of transport vouchers for those seeking work; and (ii) the creation of a standardized screening service. These interventions are designed to ease two major impediments that young Ethiopians face in finding work. These impediments arise because of the geographical distance between residential areas and job hubs, and because of the scarcity of means available for motivated job seekers to persuade potential employers of their worth (sometimes termed ‘asymmetric information problems’).
We anticipate that study participants will search harder for jobs, and will expect better offers from employers before they accept a position. We will investigate the impacts of the two programmes on both individual search choices and employment outcomes. We will also measure the effects of our policies on those who are not offered the new opportunities, who may benefit from information spill-overs or suffer from increased competition. An innovative phone-based survey will track participants at fortnightly intervals, allowing us to study the evolution of impacts across time.
We will run this field experiment in Addis Ababa, the capital of Ethiopia. Addis Ababa is an ideal place to study the costs of job search. Ethiopia is currently enjoying impressive economic growth; however, Addis Ababa still has large numbers of urban unemployed. The city is growing and sprawling, with many people living away from the clusters of new jobs. Transportation costs from the suburbs to the city centre are high, making frequent visits to job vacancy boards and work sites for job applications or interviews unaffordable for many. Furthermore, a large, recent expansion in tertiary education has considerably increased the skills of the workforce, at the cost of making it harder for employer to single out the best candidates.
We envisage that our project will be able to answer questions related both to the implementation of scalable economic and urban policy, as well as answering important theoretical questions related to job search and the role of frictions in African labour markets. If successful, the impact of our transport subsidy could provide guidance and advocacy for a variety of urban transport programmes. Similarly, the screening treatment can provide lessons for the design of certification services for the unemployed. Together, the treatments promise new lessons on the comparative costs and benefits of facilitating job search among urban African youth.