Spatial Search Cost Frictions
RCTReview
Job-seekers residing on the periphery of growing cities face high commuting costs to visit central job boards and employers [16, 17]. High travel expenses restrict search frequency and slow formal job acquisition [16, 17].
Picture this
Transport subsidies provide conditional monetary reimbursements for transit fares to urban commercial centers [4, 18]. This acts like a toll pass that temporarily eliminates geographic travel costs, allowing individuals to visit listings more frequently [17, 18].
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 [21]. At 8 months, formal employment rose by 5.4 percentage points, but all impacts on employment and earnings completely dissipated by 4 years [10, 11, 22].
- Who was studied
- 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 [4, 11, 18].
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." [10]
Anonymity_or_Distance_Job_Search_and_Labour_Market_Exclusion_in.pdf