Jobseekers’ Beliefs about Comparative Advantage and (Mis)Directed Search

Working Paper
Published on 25 September 2023


Worker sorting into tasks and occupations based on their skills plays a potentially important role in aggregate labor productivity. This sorting may be inefficient if jobseekers do not apply to jobs that match their skills. We test this idea by studying how jobseekers’ beliefs about their skills affect their job search activities and labor market outcomes. We assess communication and numeracy skills of young South African jobseekers to identify their comparative advantage across these skills. Self-perceived and measured comparative advantage persistently differ for many of these jobseekers. In a field experiment, giving jobseekers their skill assessment results reduces differences between perceived and measured skills. This leads jobseekers to redirect search toward jobs whose skill demand matches their comparative advantage in multiple search measures: an incentivized job choice task where workers choose between jobs with different skill requirements, detailed usage data from an online job search platform, and self-reported search plans. In a larger field experiment with a longer follow-up period, treatment has similar effects on self-reported measures of beliefs and search direction and substantially raises earnings and job quality, although not employment rates. These patterns are consistent with models of endogenously directed job search, where jobseekers’ beliefs about their skills influence where they direct job applications and hence the wages they are offered.


Robert Garlick

Duke University

Lukas Hensel

University of Oxford

Andrea Kiss

Carnegie Mellon University

Kate Orkin

University of Oxford