Constant Returns to Marginal Job Search Effort
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.
Picture this
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.
What the evidence says
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).
- Who
- N = 9,838 jobseekers across 1,116,952 jobseeker-vacancy matches in Lahore, Pakistan.
- How
- Instrumental Variables Two-Stage Least Squares (2SLS) field experiment using randomized phone-call initiation as an instrument for job applications.
What to do
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.
From the source
"Using treatment as an instrument for applying shows that marginal applications submitted due to treatment have a 5.9% probability of yielding interviews, which is neither substantively nor statistically different from the 6.3% probability for applications from the control group."
Why_Don’t_Jobseekers_Search_More_Barriers_and_Returns_to_Search.pdf