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G²LM|LIC Working Paper No. 59

Searching with Friends

Labour Markets in Low-Income Countries
Assisting Job Search in Low-Employment Communities

We study how active labor market policies affect the exchange of information and support among jobseekers. Leveraging a unique social network survey in Ethiopia, we find that a randomized job-search assistance intervention reduces information sharing and support between treated jobseekers and their active job-search partners. Due to lower job-search support, untreated individuals search less and, suggestively, have worse employment outcomes. These results are explained by a model of networks where unemployed individuals form job-search partnerships to exploit the complementarities of job search. These partnerships are broken if policy creates inequality in the access to information about job vacancies.

G²LM|LIC Working Paper No. 59

Searching with Friends

  • Stefano Caria
  • Simon Franklin
  • Marc Witte
  • Marc Witte
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Established in 1998 in Bonn, Germany, IZA is an independent, non-profit research institution supported by the Deutsche Post Foundation with a focus on the analysis of global labour markets. It operates an international network of about 1,500 economists and researchers spanning across more than 50 countries.

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