American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
The Selection of Talent: Experimental and Structural Evidence from Ethiopia
American Economic Review
vol. 111,
no. 6, June 2021
(pp. 1757–1806)
Abstract
We study how search frictions in the labor market affect firms' ability to recruit talented workers. In a field experiment in Ethiopia, we show that an employer can attract more talented applicants by offering a small monetary incentive for making a job application. Estimates from a structural model suggest that the intervention is effective because the cost of making a job application is large, and positively correlated with jobseeker ability. We provide evidence that this positive correlation is driven by dynamic selection. In a second experiment, we show that local recruiters underestimate the positive impacts of application incentives.Citation
Abebe, Girum, A. Stefano Caria, and Esteban Ortiz-Ospina. 2021. "The Selection of Talent: Experimental and Structural Evidence from Ethiopia." American Economic Review, 111 (6): 1757–1806. DOI: 10.1257/aer.20190586Additional Materials
JEL Classification
- J23 Labor Demand
- J24 Human Capital; Skills; Occupational Choice; Labor Productivity
- J31 Wage Level and Structure; Wage Differentials
- J64 Unemployment: Models, Duration, Incidence, and Job Search
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration