Essays on Labor Markets in Developing Countries

Abstract

Labor market frictions are particularly prevalent in developing countries. My dissertation documents the extent of various market frictions, investigates its economic consequences, and tests interventions aimed at addressing these frictions in the context of South Africa. Chapter 1 documents substantial information asymmetries about workers’ productivity between job seekers and hiring firms. We design and experimentally test a reference letter and find that it leads to employment gains and an overall increase in match quality. Chapter 2 investigates the problem that job seekers fail to follow through on their job search plans, which reduces the available applicant pool for firms. We conduct a field experiment and find that a simple planning intervention implemented as part of at government-run job counseling workshop leads to a significant increase in job search and job opportunities. Chapter 3 explores discrimination among hiring firms. I collect survey data and a unique data set of classified ads and employ a novel quasi-experimental method that exploits variation in the applicant pool composition. Results show that firms discriminate against immigrant workers and that these job seekers respond by adjusting their search strategy.