In Simple Words
Think of a two-sided market as a high school dance where boys expect all girls to be professional dancers, while girls expect all boys to give out tickets to a VIP lounge. Because neither side has seen the actual crowd before, both set unrealistic entry standards; when the dance starts, boys refuse to dance with regular dancers and girls reject normal invitations, leaving most people standing on the sidelines until they observe the actual room.
High-school job seekers in two Addis samples
- 2019 survey expectations
- 55% expected permanent work within a year
- Earlier trial controls' outcomes
- 5.8% found permanent work within a year
Different samples and years: 2019 survey beliefs versus earlier trial-control outcomes. Similar age/education screening supports the benchmark, but these are not the same people followed up.
See source →Research question
Labor market models typically assume market participants possess accurate knowledge about aggregate skill and wage distributions, suffering only from asymmetric information about specific individuals. In fast-growing urban economies, both employers and jobseekers hold severe structural misperceptions about population-level skill and employment realities.
Participants
N = 779 young jobseekers (aged 18–29 with high school or tertiary education) and N = 395 formal firm managers in Addis Ababa, Ethiopia in a 2019 follow-up study.
Study Design
Incentivized belief-elicitation survey comparing participant expectations against true sample benchmark distributions (Raven's Progressive Matrices test scores, wage data, and employment rates).
Results
75% of firm managers overestimate the cognitive ability of tertiary-educated applicants (perceiving a tertiary Raven score premium $>4\times$ the actual difference of 5.3 vs 5.0 questions); 55% of high-school jobseekers expect permanent employment within 1 year compared to 5.8% actual observed employment.
Takeaway
Administer incentivized two-sided belief elicitation surveys using standardized objective tests (such as Raven's Matrices) alongside true population benchmarks to identify structural expectational gaps between employers and jobseekers.
Source and citation
See source →Read alongside the research
Plain-English glossary
Original explanations, informed by the references below. Examples are illustrations, not data from the studies above. The research text stays unchanged.
- Follow-up
Collecting more information about participants later in a study to see what has happened to them. The term can also mean the length of time researchers keep track of them.
ExampleResearchers interview the same workers three months after a programme ends. That later interview is a follow-up.
GET-IT glossary · Follow-up ↗Read more about follow-up →