Spatial Search Cost Frictions
Job-seekers residing on the periphery of growing cities face high commuting costs to visit central job boards and employers. High travel expenses restrict search frequency and slow formal job acquisition.
Picture this
Transport subsidies provide conditional monetary reimbursements for transit fares to urban commercial centers. This acts like a toll pass that temporarily eliminates geographic travel costs, allowing individuals to visit listings more frequently.
What the evidence says
Transport subsidies increased job search probability by 12.5% and central job board visits by 9 percentage points (nearly 30%) during the intervention. At 8 months, formal employment rose by 5.4 percentage points, but all impacts on employment and earnings completely dissipated by 4 years.
- Who
- N = 3,052 young job-seekers residing at least 2.5 km from the city center in Addis Ababa, Ethiopia [4, 19].
- How
- Randomized controlled trial (RCT) supplying cash reimbursements for bus fares up to three times weekly over 13 to 20 weeks [4, 18, 20].
What to do
Distribute temporary transit vouchers targeted at peripheral job-seekers seeking rapid initial placement in formal urban vacancies.
From the source
"In other words, lowering the search cost gets young workers a formal job faster, but it does not change their long-term employment outcome."
Anonymity_or_Distance_Job_Search_and_Labour_Market_Exclusion_in.pdf