Matching Frictions and Distorted Beliefs:Evidence from a Job Fair Experiment

Girum Abebe, Stefano Caria, Marcel Fafchamps, Paolo Falco, Simon Franklin, Simon Quinn and Forhad Shilpi
Additional contact information
Stefano Caria: University of Warwick
Simon Quinn: University of Oxford

No 958, Working Papers from Queen Mary University of London, School of Economics and Finance

Abstract: We evaluate the impacts of a randomized job-fair intervention in which jobseekers and employers can meet at low cost. The intervention generates few hires, but it lowers participants’ expectations and causes both firms and workers to invest more in search as predicted by a theoretical model; this improves employment outcomes for less educated jobseekers. Through a unique two-sided belief-elicitation survey, we confirm that firms and jobseekers have over-optimistic expectations about the market. This suggests that, beyond slowing down matching, search frictions have a second understudied cost: they entrench inaccurate beliefs, further distorting search strategies and labour-market outcomes.

Keywords: job-search strategy; recruitment; matching; expectations; beliefs; reser-vation wage; youth unemployment; Ethiopia (search for similar items in EconPapers)
JEL-codes: J22 J24 J61 J64 O18 (search for similar items in EconPapers)
Date: 2023-06-30
New Economics Papers: this item is included in nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:qmw:qmwecw:958

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