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Location, Search Costs and Youth Unemployment: Experimental Evidence from Transport Subsidies in Addis Ababa

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  • Simon Franklin

Abstract

Do high search costs affect the labour market outcomes of job seekers living far away from jobs? I randomly assign transport subsidies to unemployed youth in urban Ethiopia. Treated respondents increase job search intensity, and are more likely to find good employment. Subsidies also reduce participation in temporary work during job search. I explain these results with a dynamic model of job search, in which cash constraints cause workers to give up search too early. The predictions of the model closely match the trajectory of treatment effects over time, which I estimate using a weekly phone call survey.

Suggested Citation

  • Simon Franklin, 2016. "Location, Search Costs and Youth Unemployment: Experimental Evidence from Transport Subsidies in Addis Ababa," SERC Discussion Papers 0199, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:sercdp:0199
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    Citations

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    Cited by:

    1. Jacobus Johannes de Jongh, 2019. "Understanding the Drivers of Long-Term Youth Unemployment: Micro-Level Evidence from South Africa," Proceedings of International Academic Conferences 9912297, International Institute of Social and Economic Sciences.
    2. Mesén Vargas, Juliana & Van der Linden, Bruno, 2017. "Is There Always a Trade-off between Insurance and Incentives? The Case of Unemployment with Subsistence Constraints," IZA Discussion Papers 11034, Institute of Labor Economics (IZA).
    3. Girum Abebe & Marcel Fafchamps & Michael Koelle & Simon Quinn, 2019. "Learning Management Through Matching: A Field Experiment Using Mechanism Design," NBER Working Papers 26035, National Bureau of Economic Research, Inc.
    4. Moreno-Monroy, Ana I. & Posada, Héctor M., 2018. "The effect of commuting costs and transport subsidies on informality rates," Journal of Development Economics, Elsevier, vol. 130(C), pages 99-112.
    5. Poschke, Markus, 2019. "Wage Employment, Unemployment and Self-Employment across Countries," IZA Discussion Papers 12367, Institute of Labor Economics (IZA).
    6. Clement Imbert & Marlon Seror & Yifan Zhang & Yanos Zylberberg, 2022. "Migrants and Firms: Evidence from China," American Economic Review, American Economic Association, vol. 112(6), pages 1885-1914, June.
    7. Kevin Donovan & Jianyu Lu & Todd Schoellman, 2018. "Labor Market Flows and Development," 2018 Meeting Papers 976, Society for Economic Dynamics.
    8. Fox,Louise & Kaul,Upaasna, 2018. "The evidence is in : how should youth employment programs in low-income countries be designed ?," Policy Research Working Paper Series 8500, The World Bank.
    9. Juliana Mesén Vargas, 2018. "Income Effect on Labor Outcomes for People Living in Poverty: the case of PROGRESA," LIDAM Discussion Papers IRES 2018015, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    10. Nath,Shanjukta & Wieser,Christina, 2021. "What Explains Wage Differentials for Urban Wage Earners? : Returns to Education for Ethiopia’s UrbanWage Employed," Policy Research Working Paper Series 9879, The World Bank.

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    More about this item

    Keywords

    job search; spatial mismatch; unemployment; cash constraints; urban; transpor;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure

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