JOB MARKET PAPER Job Referrals and Strategic Network Formation: Experimental Evidence from Urban Neighbourhoods in Ethiopia

In this paper, I study the behavioural motivations underlying job referral decisions. In a field experiment in Addis Ababa, Ethiopia, I show that when choosing who to refer for a job, individuals trade off personal benefits and altruistic considerations, with important implications for the efficiency and equity of the referral process. Using complete data on urban social networks and generating a panel of real work and referral opportunities over multiple sessions, I first show that workers rely on reciprocity. This leads to both significant on-the-job productivity losses and persistence in the exclusion of less connected individuals. This dynamic reciprocity is reduced under incentivised referrals, where workers are paid according to the output of their referral, which makes them screen more productive workers. Second, I find that peripheral workers use job referrals strategically to enlarge their network: they are more likely to establish new and reciprocated links, with connections persisting after 18 months. I show that these findings are consistent with a network-based job referral model where individuals trade off social payoffs and altruistic considerations. My findings suggest that conventional job referrals through social networks can reinforce labour market inequalities and prevent less socially connected individuals from getting access to jobs. However, when given referral opportunities, these individuals can manage to escape exclusion even in the long-run. Policy-makers could exploit this and provide subsidised one-off work and referral opportunities for individuals detached from the labour market, with the goal of alleviating long-term unemployment.


Do policy interventions disrupt social networks? We study how a job-search assistance intervention in Addis Ababa, Ethiopia, affects the people who exchange labour market information with programme participants prior to treatment. The intervention is a financial subsidy to use public transport which increases job search intensity among treated individuals. We find that the job-search partners of treated individuals reduce their job search efforts compared to the partners of untreated jobseekers. This is not because they receive more information about vacancies from their treated friends. On the contrary, we document less information sharing and social interaction between job-search partners. We present suggestive evidence that this may be because cooperation in job search becomes harder when one jobseeker has access to more resources than the other.

Do Youth Employment Programs Improve Labor Market Outcomes? A Quantitative Review
[World Development, 114 (2019): 237-253]
(with Jochen Kluve, Susana Puerto, David Robalino, Jose Romero, Friederike Rother, Jonathan Stöterau, and Felix Weidenkaff)

Bringing young people into productive work is a key labor market challenge in both developing and developed economies, and a multitude of labor market interventions have been implemented to assist vulnerable youths. To assess whether these interventions have succeeded in improving young people's labor market outcomes, this study systematically and quantitatively reviews 113 impact evaluations of youth employment programs worldwide. Of a total of 3105 effect estimates we extract from these studies, one-third are positive significant. The unconditional average effect size across all programs is small, both for employment-related outcomes (Hedges' g = 0.05, SE = 0.02) and earnings-related outcomes (Hedges' g = 0.04, SE = 0.02). We analyze correlates of success in a meta-regression framework. We find that (i) programs are more successful in middle- and low-income countries; (ii) the intervention type is less important than design and delivery; (iii) programs integrating multiple services are more successful; (iv) profiling of beneficiaries, individualized follow-up systems and incentives for services providers matter; and (v) impacts are of larger magnitude in the long-term. Some of these findings provide new and important insights about the design and delivery of interventions, whereas others confirm those of previous reviews. Ultimately, our findings provide practitioners with an improved evidence base about how certain design features contribute to successful youth employment programs in different contexts.

COVID-19 WORKThe Impact of COVID-19 on the Lives of Women in the Garment Industry: Evidence from Ethiopia
(with Morgan Hardy, Gisella Kagy, Christian Johannes Meyer, and Eyoual Tamrat)
[project description] [materials]

Global Behaviors and Perceptions in the COVID-19 Pandemic
(with Thiemo Fetzer, Lukas Hensel, Jon Jachimowicz, Johannes Haushofer, Andriy Ivchenko, Stefano Caria, Elena Reutskaja, Christopher Roth, Stefano Fiorin, Margarita Gómez, Gordon Kraft-Todd, Friedrich Gotz, Erez Yoeli)


Formal Hiring Practices, Firm Growth, and Inclusive Labour Markets
(with Lukas Hensel and Tsegay Gebrekidan Tekleselassie)

Network Position and Public Good Contributions
(with Simon Franklin)

Economic Impacts of Mental Health Interventions in Low and Middle Income Countries: A Systematic Review and Meta-Analysis
(with Thandi Davies, Johannes Haushofer, Crick Lund, Kate Orkin)
This paper systematically and quantitatively reviews 39 mental health trials conducted in lower- and middle income countries to assess whether the interventions causally changed the economic and employment position of participants. This is the first meta-analysis studying the impact of mental health interventions on economic outcomes.

Urban Job Search Networks Along a Spatial Dimension
This paper introduces a unique set of urban job network data for young  unemployed residents of Addis Ababa, Ethiopia. I use these data to test the assumption that locally truncated networks are a reasonable approximation for the complete network structure. Comparing restricted neighbourhood contacts with the city-wide job contacts of a sample of job-seekers, I find that the unrestricted city-wide links display a higher degree of homophily in demographics than local links, but a lower degree of homophily on work-related and aspirational characteristics. This is in line with the intuition of a simple theoretical model on geographical link formation that I present.

Overcoming Gender-Biases in Social Network Elicitation
I discuss two alternative ways of network elicitation: eliciting networks with open-ended listings from memory yields fewer than a third of connections than using pre-populated network rosters, omitting most female job contacts. This underreporting of women could be linked to later discrimination of women at the job referral stage (cf. Beaman et al., 2018). In a survey experiment, I develop and test two different interventions to nudge participants into reporting the correct gender balance of their network in open-ended network surveys.

OUTSIDE OF ECONOMICSCan mental health treatments help prevent or reduce intimate partner violence in low- and middle-income countries? A systematic review
[BMC Women's Health, 2019, 19:34]
(with W. A. Tol, S. M. Murray, C. Lund, P. Bolton, L. K. Murray, T. Davies, J. Haushofer, K. Orkin, L. Salama, V. Patel, G. Thornicroft and J. K. Bass)

rc Witte Marc Witte Marc Witte