American Economic Review Vol. 111 No. 6 2021
The Selection of Talent: Experimental and Structural Evidence from Ethiopia
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.
- DOI
- 10.1257/aer.20190586
- Volume
- 111
- Issue
- 6
- Pages
- 1757-1806
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref