Jobseekers’ Beliefs about Comparative Advantage and (Mis)Directed Search

Authors

Andrea Kiss, Carnegie Mellon UniversityFollow
Robert Garlick, Duke UniversityFollow
Kate Orkin, University of OxfordFollow
Lukas Hensel, Peking UniversityFollow

Publication Date

10-4-2023

Series

Upjohn Institute working paper ; 23-388

DOI

10.17848/wp23-388

Abstract

Worker sorting into tasks and occupations has long been recognized as an important feature of labor markets. But this sorting may be inefficient if jobseekers have inaccurate beliefs about their skills and therefore apply to jobs that do not match their skills. To test this idea, we measure young South African jobseekers’ communication and numeracy skills and their beliefs about their skill levels. Many jobseekers believe they are better at the skill in which they score lower, relative to other jobseekers. These beliefs predict the skill requirements of jobs where they apply. In two field experiments, giving jobseekers their skill assessment results shifts their beliefs toward their assessment results. It also redirects their search toward jobs that value the skill in which they score relatively higher—using measures from administrative, incentivized task, and survey data—but does not increase total search effort. It also raises earnings and job quality, consistent with inefficient sorting due to limited information.

Issue Date

September 2023

Note

Upjohn project #58000

Sponsorship

W.E. Upjohn Institute for Employment Research Early Career Research Award No. 18-156-04, World Bank Jobs Group, World Bank Africa Gender Innovation Lab, National Science Foundation (#1824413), Private Enterprise Development in Low-Income Countries program (#3024 and #4728), UKRI GCRF Accelerating Achievement for Africa’s Adolescents Hub, and IPA Research Methods Initiative

Subject Areas

LABOR MARKET ISSUES; Job search; Job skills and standards