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The Selection of Talent: Experimental and Structural Evidence from Ethiopia

Author

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  • Girum Abebe
  • A. Stefano Caria
  • Esteban Ortiz-Ospina

Abstract

We study how search frictions in the labor market affect firms' ability to recruit talented workers. In a field experiment in Ethiopia, we show that an employer can attract more talented applicants by offering a small monetary incentive for making a job application. Estimates from a structural model suggest that the intervention is effective because the cost of making a job application is large, and positively correlated with jobseeker ability. We provide evidence that this positive correlation is driven by dynamic selection. In a second experiment, we show that local recruiters underestimate the positive impacts of application incentives.

Suggested Citation

  • Girum Abebe & A. Stefano Caria & Esteban Ortiz-Ospina, 2021. "The Selection of Talent: Experimental and Structural Evidence from Ethiopia," American Economic Review, American Economic Association, vol. 111(6), pages 1757-1806, June.
    • Handle: RePEc:aea:aecrev:v:111:y:2021:i:6:p:1757-1806
    DOI: 10.1257/aer.20190586
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    Cited by:

    1. Feld, Brian & Nagy, AbdelRahman & Osman, Adam, 2022. "What do jobseekers want? Comparing methods to estimate reservation wages and the value of job attributes," Journal of Development Economics, Elsevier, vol. 159(C).
    2. Samuel Bazzi & Lisa Cameron & Simone Schaner & Firman Witoelar, 2021. "Information, Intermediaries, and International Migration," Melbourne Institute Working Paper Series wp2021n30, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    3. Banerjee, Abhijit & Sequeira, Sandra, 2023. "Learning by searching: Spatial mismatches and imperfect information in Southern labor markets," Journal of Development Economics, Elsevier, vol. 164(C).
    4. Blattman, Christopher & Dercon, Stefan & Franklin, Simon, 2022. "Impacts of industrial and entrepreneurial jobs on youth: 5-year experimental evidence on factory job offers and cash grants in Ethiopia," Journal of Development Economics, Elsevier, vol. 156(C).
    5. Oriana Bandiera & Ahmed Elsayed & Andrea Smurra & Céline Zipfel, 2022. "Young Adults and Labor Markets in Africa," Journal of Economic Perspectives, American Economic Association, vol. 36(1), pages 81-100, Winter.
    6. Girum Abebe & Stefano Caria & Marcel Fafchamps & Paolo Falco & Simon Franklin & Simon Quinn & Forhad Shilpi, 2023. "Matching Frictions and Distorted Beliefs:Evidence from a Job Fair Experiment," Working Papers 958, Queen Mary University of London, School of Economics and Finance.
    7. Martin Chegere & Paolo Falco & Andreas Menzel, 2023. "Social Ties at Work and Effort Choice: Experimental Evidence from Tanzania," CERGE-EI Working Papers wp763, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    8. Jonas Hjort & Vinayak Iyer & Golvine De Rochambeau, 2020. "Informational Barriers to Market Access: Experimental Evidence from Liberian Firms," Sciences Po publications 2020-09, Sciences Po.
    9. Poschke, Markus, 2019. "Wage Employment, Unemployment and Self-Employment across Countries," IZA Discussion Papers 12367, Institute of Labor Economics (IZA).
    10. Chiplunkar, Gaurav & Kelley, Erin & Lane, Gregory, 2024. "Competitive Job Seekers: When Sharing Less Leaves Firms at a Loss," IZA Discussion Papers 16840, Institute of Labor Economics (IZA).
    11. Diego A. Martin, 2024. "Women Seeking Jobs with Limited Information: Evidence from Iraq," CID Working Papers 157a, Center for International Development at Harvard University.
    12. Chowdhury, Shyamal & Hasan, Syed & Sharma, Uttam, 2024. "The Role of Trainee Selection in the Effectiveness of Vocational Training: Evidence from a Randomized Controlled Trial in Nepal," IZA Discussion Papers 16705, Institute of Labor Economics (IZA).
    13. Laura Boudreau & Julia Cajal-Grossi & Rocco Macchiavello, 2023. "Global Value Chains in Developing Countries: A Relational Perspective from Coffee and Garments," Journal of Economic Perspectives, American Economic Association, vol. 37(3), pages 59-86, Summer.
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    15. repec:hal:spmain:info:hdl:2441/6jahov5tde8vt9aplqrgg3trl4 is not listed on IDEAS

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    More about this item

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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