Finding a job is a challenging process ---and it can be especially difficult and overwhelming for youth and people entering the labor market for the first time. Youth unemployment rates in Sub-Saharan Africa are double those of adult unemployment for both men and women. Estimates show that 11 million youth will enter the labor market in Sub-Saharan Africa each year for the coming decade. This offers the potential to dramatically reduce poverty. But to make the most of this opportunity, young people need to engage in productive employment that fuels economic growth. In this blog, we present two simple and effective strategies to support job seekers to find employment.
This is the first in our series of posts by Ph.D. students on the job market this year.
One of the key challenges of markets is to assess the quality of goods. A look at online dating websites – a market where information asymmetries loom particularly large - shows different ways in which people try to communicate that they are of “high quality”. A common strategy is to start your introduction with “My friends describe me as…” (to be followed by some glowing testimony “…smart, athletic, high-achieving – yet humble”). Why may this strategy not be effective? It raises questions about whether these friends are truthful and whether they have all the relevant information about your quality as a partner. The really interesting question you never see answered is: “How would your ex-partner describe you?”
My job market paper “The Value of Reference Letters”, coauthored with Rulof Burger (SU) and Patrizio Piraino (UCT), is about the challenges hiring firms face in identifying high-quality applicants. While the literature has largely focused on the role of friends and family members (Topa 2011, Beaman and Magruder 2012) in job referrals, we investigate whether information from ex-employers can facilitate the matching process. Specifically, we test the effect of a standardized reference letter asking previous employers to rate workers on a range of hard skills (e.g. numeracy, literacy) and soft skills (e.g. reliability, team ability).
This is the second in our series of posts by graduate students on the job market this year.
In the 1960s, black and white individuals in the United States had radically different labor market outcomes. In 1962, the unemployment rate for African-Americans was 13 percent while it was only 6 percent for whites. Fifty years have passed, enough time for Martin Luther King to go from movement leader to monument, but as of 2010, the unemployment rate in the U.S.
One of the frustrations facing job seekers worldwide, but especially in many developing countries, is how much finding a job depends on who you know rather than what you know. For example, in work I’ve done with small enterprises in Sri Lanka, less than 2 percent of employers openly advertised the position they last hired – with the most common ways of finding a worker being to ask friends, neighbors or family members for suggestions. Clearly networks matter for finding jobs.