Educational Heterogeneity in Information Frictions
RCTReview
Information interventions in labor markets are often expected to benefit highly educated candidates most due to their greater formal qualifications. However, when expectational misalignments are concentrated among secondary-educated jobseekers, low-cost market exposure generates substantial welfare gains for less-educated groups while having minimal impact on university graduates.
Picture this
Think of two people trying to sell used cars: a luxury car seller whose asking price is already aligned with market value, and a basic hatchback seller who demands luxury prices. When both visit an open auto market, the luxury seller learns very little new, but the hatchback seller receives an immediate reality check, lowers their asking price to market rates, and successfully completes a sale.
What the evidence says
High-school educated jobseekers doubled their permanent employment rate from 5.8% to 11.6% (ITT = +5.76 percentage points, p < 0.05) and increased formal employment by 45% (+4.82 percentage points, p < 0.10), driven by an 8.7% reduction in reservation wages (p < 0.10); post-secondary jobseekers showed no statistically significant change in permanent employment (-2.6 percentage points, p > 0.10) or reservation wages (-3.5%, p > 0.10).
- Who was studied
- N = 1,705 endline jobseekers (comparing high-school diploma holders with post-secondary degree/diploma holders) in Addis Ababa, Ethiopia.
- How
- Stratified randomized field experiment measuring treatment effect heterogeneity by baseline educational attainment across a 12-month panel.
What to do
Target wage-information and market-exposure programs specifically toward high-school educated jobseekers who face severe structural expectational misalignments regarding formal entry-level roles.
From the source
"The effects on jobseekers are concentrated among those without tertiary education, whose employment prospects improve significantly as a result (permanent employment rates double and formal employment rates increase by almost 50 percent)."
Matching_Firms_and_Young_Jobseekers_through_a_Job_Fair_A_Field_Experiment.pdf