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Overcoming Information Asymmetry in Job Search: The Power of a Reference Letter
(World Bank, Washington, DC, 2018-04) Carranza, Eliana; Pimkina, Svetlana
The labor market is characterized by information gaps between work seekers and prospective employers, particularly when it comes to hiring low-skill entry level workers. Information asymmetries about workers’ skills can result in poorer matches, lower productivity for employers, and increased inequity for the unemployed. One approach to resolving the asymmetry is introducing a formal referral system: reference letters from former employers. The authors finds that reference letters improve firms’ screening ability and employment outcomes, especially for women. Despite their high value, the use of reference letters in job applications is low, partly due to work seekers underestimating their value.
Overcoming Behavioral Biases in Job Search: The Value of Action Planning
(World Bank, Washington, DC, 2018-04) Carranza, Eliana; Pimkina, Svetlana
Job search is a largely self-regulated process, subject to behavioralbiases that lead to sub-optimal search and employment outcomes.Within this context, we designed, implemented and tested anaction-planning tool to promote greater job search intensity.We find that action planning helps unemployed youths to follow through on their job search intentions, and adopt a more efficient and effective search strategy. Greater search efficiency and effectiveness translates to sizeable improvements in employment outcomes. Given that a rising number of young people globally are not enrolled in education, employed, or searching for work it is particularly important to understand how to optimize the job search process. There is suggestive evidence that in the presence of high and persistent unemployment, South African youth are becoming increasingly discouraged in their job search.
Gender Gaps at the Enterprise Level: Evidence from South Africa
(World Bank, Washington, DC, 2011-09) Campos, Francisco
Female-owned small to medium businesses in the Western Cape Province in South Africa are less productive, generate lower revenues and have less employees than male-owned enterprises. In this brief, we use the baseline survey for an impact evaluation of a business development services program to identify why these differences exist and explore paths towards policy interventions to overcome them. Author conclude that the concentration of businesses in low performing sectors, the lack of commitment to the business, the intertwining of household and business responsibilities, and access to finance can be important barriers to the growth of women-headed enterprises. Author suggests targeted alternative interventions to address these constraints and recommend comparing their effectiveness through rigorous evaluations. Author argue that the gender differences identified in the performance of Small, Medium, and Micro Enterprises (SMMEs) in this Province of South Africa can be due to a combination of: 1) the concentration of women-entrepreneurs in a small number of low-performing sectors, 2) firms being seen by entrepreneurs as an interim solution, 3) the intertwining of household and enterprise money, and 4) credit constraints.