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Location, Search Costs and Youth Unemployment: Experimental Evidence from Transport Subsidies

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  • Simon Franklin

Abstract

Do high search costs affect the labour market outcomes of jobseekers living far away from jobs? I randomly assign transport subsidies to unemployed youth in urban Ethiopia. Treated respondents increase job search intensity and are more likely to find good, permanent, jobs. Subsidies also induce a short‐term reduction in temporary work. I use a high‐frequency phone call survey to track the trajectory of search behaviour over time to show that the subsidies significantly increased job search intensity and the use of formal search methods. The evidence suggests that cash constraints cause young people to give up looking for good jobs too early.

Suggested Citation

  • Simon Franklin, 2018. "Location, Search Costs and Youth Unemployment: Experimental Evidence from Transport Subsidies," Economic Journal, Royal Economic Society, vol. 128(614), pages 2353-2379, September.
    • Handle: RePEc:wly:econjl:v:128:y:2018:i:614:p:2353-2379
    DOI: 10.1111/ecoj.12509
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    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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