In Simple Words
Earning higher daily wages in short-term project roles is like working as a high-paid freelance contractor rather than a lower-paid permanent office employee. The worker receives higher immediate daily compensation, but the work is organized around short contracts that require frequent re-entry into the job market.
Young male job applicants in Malawi
- Without short work experience
- Reference wage outcome
- With short work experience
- About USD 3.83 more per day
Eight-month instrumental-variable estimate from randomized fallback-job chances. Five days of work; estimate is imprecise and depends on the instrument assumptions.
See source →Research question
In low-income urban labor markets, high-paying employment opportunities are often concentrated in short-term project-based roles rather than permanent, stable positions. Job seekers face a structural trade-off between maximizing short-term daily earnings and securing long-term employment stability.
Participants
N = 227 male job seekers with secondary education in Lilongwe, Malawi, tracked over an 8-month post-intervention period.
Study Design
Instrumental variables (IV) estimation utilizing randomly assigned probabilistic job guarantees to evaluate post-intervention contract duration proxies (pay frequency unit: 1=daily, 2=weekly, 3=fortnightly, 4=monthly) and daily earnings.
Results
Acquiring short-term work experience increased average daily wages by $3.83 (an 80% wage increase) but resulted in a negative coefficient (-0.386, p > 0.10) on the pay frequency permanence index, indicating that wage gains were concentrated in less permanent, daily-paid positions.
Takeaway
Evaluate youth employment interventions using both daily wage metrics and contract duration indicators to measure long-term job stability alongside wage growth.