Anonymity or Distance? Experimental Evidence on the Obstacles That Young People Face in the Labour Market

Do search frictions constrain the labour market prospects of young workers? We conduct a randomised evaluation of two programmes designed to lower spatial and informational barriers to job search among 4,000 young Ethiopians. One group of subjects receives a transport subsidy. Another group participates in a workshop where their skills are certified and they receive training on how to make effective job applications. We find that both treatments significantly improve the quality of the jobs young workers obtain, and the effects are strongest for the most disadvantaged job-seekers. Upon investigating the underlying mechanisms, we show that both interventions mitigate the adverse effects of spatial constraints on labour allocation, and that the workshop helps job applicants to better signal their abilities.