How important are matching frictions in the labor market? Experimental & non-experimental evidence from a large Indian firm

Abhijit Banerjee and Gaurav Chiplunkar

Journal of Development Economics, 2024, vol. 171, issue C

Abstract: This paper provides evidence of matching frictions in the Indian labor market. Using several methods to elicit genuine preferences of job-seekers over jobs, we show that: (a) there is substantial variation in job-seekers preferences over the same jobs; and (b) placement officers, responsible for placing job-seekers in jobs, have poor knowledge of it. Providing placement offers with this information improves matching of job-seekers to interviews, even after taking into account redistribution of jobs across job-seekers. Treated job-seekers get more preferred jobs and retain them in the short run (three months), but not in the longer run (six months).

Keywords: Matching; Labor; Job-search; Recruitment; Experiment (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:171:y:2024:i:c:s0304387824000798

DOI: 10.1016/j.jdeveco.2024.103330

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