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Location, search costs and youth unemployment: experimental evidence from transport subsidies

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  • Franklin, Simon

Abstract

Do high search costs affect the labour market outcomes of jobseekers 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, permanent, jobs. Subsidies also induce a short‐term reduction in temporary work. I use a high‐frequency phone call survey to track the trajectory of search behaviour over time to show that the subsidies significantly increased job search intensity and the use of formal search methods. The evidence suggests that cash constraints cause young people to give up looking for good jobs too early.

Suggested Citation

  • Franklin, Simon, 2018. "Location, search costs and youth unemployment: experimental evidence from transport subsidies," LSE Research Online Documents on Economics 87938, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:87938
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