Jobseekers' Beliefs about Comparative Advantage and (Mis)Directed Search

Andrea Kiss, Robert Garlick, Kate Orkin () and Lukas Hensel
Additional contact information
Andrea Kiss: Carnegie Mellon University
Kate Orkin: University of Oxford

No 16522, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Worker sorting into tasks and occupations has long been recognized as an important feature of labor markets. But this sorting may be inefficient if jobseekers have inaccurate beliefs about their skills and therefore apply to jobs that do not match their skills. To test this idea, we measure young South African jobseekers' communication and numeracy skills and their beliefs about their skill levels. Many jobseekers believe they are better at the skill in which they score lower, relative to other jobseekers. These beliefs predict the skill requirements of jobs where they apply. In two field experiments, giving jobseekers their skill assessment results shifts their beliefs toward their assessment results. It also redirects their search toward jobs that value the skill in which they score relatively higher – using measures from administrative, incentivized task, and survey data – but does not increase total search effort. It also raises earnings and job quality, consistent with inefficient sorting due to limited information.

Keywords: search frictions; information frictions; occupational choice (search for similar items in EconPapers)
JEL-codes: J22 J24 J31 J64 O15 (search for similar items in EconPapers)
Pages: 101 pages
Date: 2023-10
New Economics Papers: this item is included in nep-exp and nep-lma
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Related works:
Working Paper: Jobseekers' beliefs about comparative advantage and (mis)directed search (2023)
Working Paper: Jobseekers’ Beliefs about Comparative Advantage and (Mis)Directed Search (2023)
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