Review of Economic Studies
We show that helping young job-seekers to signal their skills to employers can generate large and persistent improvements in labour market outcomes. We do this by comparing an intervention that improves the ability to signal skills (the ‘job application workshop’) to a transport subsidy treatment designed to reduce the cost of job search. We find that in the short-run both interventions have large positive effects on the probability of finding formal jobs. The workshop also increases the probability of having a stable job with an open-ended contract. Four years later, the workshop significantly increases earnings, job satisfaction and employment duration, while the effects of the transport subsidy have dissipated. These gains are concentrated among groups who generally have worse labour market outcomes. Overall, our findings highlight that young people possess valuable skills that are unobservable to employers. Making these skills observable generates earning gains that are far greater than the cost of the intervention.
Co-authors: GIRUM ABEBE; STEFANO CARIA; MARCEL FAFCHAMPS; PAOLO FALCO; SIMON FRANKLIN