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The Selection of Talent: Experimental and Structural Evidence from Ethiopia

Girum Abebe (), A. Stefano Caria and Esteban Ortiz-Ospina

American Economic Review, 2021, vol. 111, issue 6, 1757-1806

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.

JEL-codes: J23 J24 J31 J64 O15 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1257/aer.20190586

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