VoxDev Development Economics
S4 Ep50: Helping jobseekers signal their skills
Dec 5, 2024
Marianne Bertrand, a labor markets expert at Chicago Booth and Co-Chair of J-PAL, joins Stefano Caria from the University of Warwick to explore effective skills signaling for job seekers in low and middle-income countries. They discuss the challenges job seekers face in proving their qualifications amid information asymmetry. The conversation reveals how standardized certifications can enhance job outcomes and the role of social networks in hiring practices. They propose solutions like wage subsidies to improve hiring efficiency and suggest scaling up skill-signaling programs to boost employment.
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Quick takeaways
- Credible skills signals from trusted institutions can effectively bridge the information gap between job seekers and employers, enhancing employment outcomes.
- Implementing standardized skill endorsements may boost formal employment and economic growth, yet raises concerns about the perception of those without certifications.
Deep dives
The Challenge of Unemployment in Low-Income Countries
Unemployment, particularly youth unemployment, poses a significant challenge in low- and middle-income countries, affecting around 200 million individuals globally, with the youth rate being three times higher than that of the general population. Many young people have given up on job searches, contributing to a larger issue of non-employment and underemployment. This situation creates a market failure regarding skill visibility, where employers struggle to discern the qualifications of potential candidates. Consequently, people qualified for jobs face difficulties proving their worth, impacting the overall hiring process negatively.
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