Worker Heterogeneity and Job Search: Evidence from a Six-Year Experiment in Uganda

Working Paper
Published on 1 December 2020

Abstract

Developing countries face the challenge of aiding large cohorts of labour market entrants find good jobs. How to do so is complicated by job seekers differing in their skills, information and traits. Bandiera et al. (2020) present results from a six-year field experiment studying job search behaviour among youth in urban labour markets in Uganda, who at baseline, are unskilled yet optimistic over their job prospects. The researchers engineer heterogeneity across workers through the offer of vocational training, and job assistance to meet with potential employers. Vocational training leads to measurable improvements in skills, while job assistance alters information workers have on their prospects, as call back rates from employers are low. Search behaviour varies across the skills distribution: relative to controls, skilled youth become even more optimistic, search more intensively, and direct search towards better firms. The additional provision of job assistance to skilled youth causes them to revise down their beliefs, search less intensively and over lower quality firms. These differential search strategies impact long-run outcomes: skilled workers without job assistance have higher employment rates and spell durations, and match to higher quality jobs and firms. Fixed traits across workers such as their cognitive ability and self-evaluation determine search strategies and outcomes because they interlink with how youth respond to the low call-back rates from job assistance. Overall, this study provides insights on sources of worker heterogeneity driving labour market inequalities and inefficiencies, and on the design and targeting of labour market programmes.

Authors

Oriana Bandiera

London School of Economics

Vittorio Bassi

University College London

Robin Burgess

London School of Economics

Imran Rasul

University College London

Munshi Sulaiman

Save the Children

Anna Vitali

University College London