Leveraging Employment Agencies to Reduce Search Frictions for Firms

Research Note
Published on 29 February 2024


We collect hiring data from 799 private formal firms in Addis Ababa, Ethiopia, and leverage employment agencies to help firms match with more college-educated applicants. We find that firms actually become less optimistic of college graduates’ productivity and less likely to hire college graduates, but potentially increase their profit. Our findings suggest that employment agencies may facilitate information exchange in the labor market and improve hiring efficiency.


David Qihang Wu

University of California, Berkeley

Samuel Zicheng Wang

UC Berkeley