Labor Markets in Developing Countries: Micro and Macro Perspectives
Tuesday, Jan. 5, 2021 3:45 PM - 5:45 PM (EST)
- Chair: Douglas Gollin, University of Oxford
Job Search and Matching with Two-Sided Limited Information about Workseekers’ Skills
AbstractWorkseekers’ search decisions and firms’ hiring decisions use potentially limited information about workseekers’ skills. We conduct three field experiments which find patterns consistent with both firms and workseekers facing limited information about workseekers’ skills. Assessing workseekers’ skills, giving workseekers the assessment results, and helping them to credibly share the results with firms increases workseekers’ employment and earnings. It also aligns their beliefs and search strategies more closely with their skills. Giving this information only to workseekers has similar effects on beliefs and search, but smaller effects on employment and earnings. Giving information only to firms increases callbacks. These patterns are consistent with two-sided information frictions, a finding that is important for the design of information-provision mechanisms.
A Cross-Country Perspective on the Labor Market Responses to Aggregate Shocks
AbstractWe assess the cyclicality of labor market stocks (employment, unemployment) and flows (job-finding rate, employment exit rate) in a cross-country context. Our work builds on the database we developed in Donovan et al. (2020), which contains short panel microdata for 65 million workers spanning 42 countries around the world and across a wide range of development. The scope of the data allow us to document how labor market institutions, development, and the type of shock matter for cyclicality. We use the microdata to assess what portion of the overall findings can be attributed to observable characteristics of workers and their employers.
Labor Market Frictions and Economic Development: Cross-Country Evidence from Employment Durations
AbstractWe harmonize repeated cross-sections on individual labor market outcomes for many countries, ranging in income per capita from Niger to Luxembourg and document that mean employment durations increase with GDP per worker across countries. Diﬀerences in wage worker characteristics across countries explain only one quarter of the cross-country variation in employment durations. Two thirds of the variation are due to diﬀerences across countries in the return to worker characteristics. Most of the variation in return diﬀerences is driven by education, with a higher (tenure) return to education in richer countries. To understand the sources of this gap, we estimate hazard functions by population subgroups for all countries, and use them to estimate a model of labor market turnover. This gives insights into the extent to which observed diﬀerences in employment duration are driven by diﬀerences in information frictions, matching frictions and institutional factors.
- O1 - Economic Development
- O4 - Economic Growth and Aggregate Productivity