Constant Returns to Marginal Job Search Effort

In Simple Words

Think of fishing in a large lake using a net. Standard theory suggests that after catching the easiest fish, throwing the net additional times will yield smaller catches. However, if a fisher misses many prime fishing spots on different days simply because they felt tired on those mornings, giving them a push to fish on those missed days yields just as many fish per cast as their usual fishing trips.

Research question

Standard economic search models assume that as individuals increase search effort and submit more job applications, each additional application yields diminishing returns in interview invitations or job quality. If marginal applications generated by lowering behavioral friction produce lower returns, policy interventions promoting search effort might be inefficient.

Participants

N = 9,838 jobseekers across 1,116,952 jobseeker-vacancy matches in Lahore, Pakistan.

Study Design

Instrumental Variables Two-Stage Least Squares (2SLS) field experiment using randomized phone-call initiation as an instrument for job applications.

Results

Marginal applications induced by treatment yielded a 5.87% interview probability (95% CI [4.9%, 6.9%]), which is statistically indistinguishable from the 6.29% interview probability for inframarginal control applications (p = 0.647).

Takeaway

Expand job search assistance and application subsidies without restricting output targets, as additional applications generated by relaxing behavioral initiation barriers do not decay in quality or interview yield.

Related findings

• Dual Coordination Frictions in Application-Based Matching →Labour & employment

  Think of job hunting like sending college applications. The first friction happens when many students apply to the exact same university, leaving smaller colleges with zero applicants.

• Partially Directed Search under Behavioral Friction →Labour & employment

  Think of shopping at a large supermarket with quality items scattered across many aisles. A shopper prefers organic produce and selects it when spotted, but walking down every aisle takes physical effort, so they leave many top-tier items on the shelves.

• Ability-Dependent Peer Screening →Labour & employment

  Imagine trying to pick the best chess player out of a crowd. Only a master chess player has the expertise to accurately assess who among their acquaintances truly plays at an elite level, whereas a beginner cannot distinguish between a decent amateur and a grandmaster.

• Ability-Heterogeneous Wage Returns →Labour & employment

  Imagine a nightclub with a strict dress code based on exam scores where high scorers enter easily without extra effort. For high-scoring individuals, additional work experience adds little value because employers already hire them based on test scores.