Firms in low- and middle-income countries rarely advertise their vacancies formally and instead use social networks. This might limit the number and type of vacancies they can profitably create. We conduct a field experiment with small and medium-sized enterprises in Ethiopia to reduce firms' cost of formal search. Treated firms search for employees outside their networks and try to fill more demanding white-collar positions. However, they struggle to fill these newly created positions and their beliefs about the returns to formal employee search decrease. Providing additional screening services for firms does not affect the results, suggesting that information asymmetries about applicants' skills do not limit formal search. We conclude that informal employee search does not limit firms' hiring in our context.
(with Morgan Hardy, Seongyoon Kim, and Andreas Menzel)
We document widespread self-reported interest in hiring or working for each other among small firm owners in Ghana and a high valuation of information on others’ reported interest in a Becker-Degroot-Marschak exercise. Recipients of information on interested employees have higher survival rates, sales, wage bills, and overall income half a year after receiving the information relative to non-recipients with equal information valuation. Information on interested employers causes lower, but still positive, income increases along with a reduction in number of workers among recipients. Entrepreneurs rarely start working for nor hiring other entrepreneurs; instead, information recipients adjust existing labor inputs.
What motivates workers' referral decisions? Combining a field experiment in a firm and urban social network data, I first show that workers primarily refer those who previously referred them. This reciprocity leads to significant on-the-job productivity losses and excludes less connected individuals. Incentivized referrals reduce reciprocity and make workers screen more productive colleagues. Second, peripheral workers use referrals strategically to establish new and reciprocated links which persist after 18 months. These results are consistent with a network-based referral model where individuals trade off pecuniary and social incentives. The findings suggest that referrals through social networks can reinforce labor market inequalities.
The Economic Effects of Mental Health Interventions in Low and Middle-Income Countries
(with Thandi Davies, Johannes Haushofer, Crick Lund, Kate Orkin)
Draft available on request
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.
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 consistent with a model of networks where unemployed individuals form job-search partnerships to exploit the complementarities of job search.
(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)
[Journal of Economic Behavior & Organization, 193 (2022): 473–496]
We conducted a large-scale survey covering 58 countries (N = 108,075) at the onset of the COVID-19 pandemic between March 20th and April 7th 2020—to explore how beliefs about citizens’ and government’s response to the COVID-19 pandemic, and the actions taken by governments, affected mental well-being. Our analyses reveal three findings. First, many respondents indicate that their country’s citizens and government’s response was insufficient. Second, respondents’ perception of an insufficient public and government response was associated with lower mental well-being. Third, we exploit time variation in country-level lockdown announcements, both around the world and through an event-study in the UK, and find that strong government actions—i.e., announcing a nationwide lockdown—were related to an improvement in respondents’ views of their fellow citizens and government, and to better mental well-being. These findings suggest that policy-makers may not only need to consider how their decisions affect the spread of COVID-19, but also how such choices influence the mental well-being of their population.
(with Morgan Hardy, Gisella Kagy, Christian Johannes Meyer, and Eyoual Tamrat)
[World Development, 137 (2021)] [ungated version]
In a globalized world, pandemics transmit impacts through markets. We document employment changes, coping strategies, and welfare indicators of garment factory workers in Ethiopia’s largest industrial park during the early stages of the Coronavirus Disease 2019 pandemic. We field a phone survey on female workers employed at the start of the crisis during a two month period in which cases are rapidly rising globally, but not locally. Our data suggest significant changes in employment, high levels of migration away from urban areas to rural areas if women are no longer working, and high levels of food insecurity. These findings compel a research and policy focus on documenting and mitigating the market-reach of pandemics on low-income women at the margins.
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.
SELECTED WORK IN PROGRESS
Demand for Feedback and Job Search
(with Lukas Hensel, Ingo Isphording, Jonas Radbruch, and Tsegay Tekleselassie)
Vacancy Information and Applicant Selection
(with Lukas Hensel and Tsegay Tekleselassie)
Reducing Frictions in Ethiopian Labor Markets
(with Morgan Hardy and Christian Meyer)
Network Position and Public Good Contributions
(with Simon Franklin)
The direct and indirect effects of female training interventions in a traditional society
(with Selim Gulesci and Ahmed Elsayed)
Impacts of Small-Scale Biogas Technology on Energy Access in Egypt
(with Olivier Deschenes, Ahmed Elsayed, Nico Pestel, Samer Atallah)
OUTSIDE OF ECONOMICS
[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)
Epidemiological research suggests an interrelationship between mental health problems and the (re)occurrence of intimate partner violence (IPV). However, little is known about the impact of mental health treatments on IPV victimization or perpetration, especially in low- and middle-income countries (LMIC).
We conducted a systematic review to identify prospective, controlled studies of mental health treatments in LMIC. We defined ‘mental health treatment’ as an intervention for individuals experiencing mental ill health (including substance misuse) including a substantial psychosocial or pharmacological component. Studies had to measure a mental health and IPV outcome. We searched across multi-disciplinary databases using a structured search strategy. Screening of title/abstracts and full-text eligibility assessments were conducted by two researchers independently, data were extracted using a piloted spreadsheet, and a narrative synthesis was generated.
We identified seven studies reported in 11 papers conducted in five middle-income countries. With the exception of blinding, studies overall showed acceptable levels of risk of bias. Four of the seven studies focused on dedicated mental health treatments in various populations, including: common mental disorders in earthquake survivors; depression in primary care; alcohol misuse in men; and alcohol misuse in female adult sex workers. The dedicated mental health treatments targeting depression or alcohol misuse consistently reduced levels of these outcomes. The two studies targeting depression also reduced short-term IPV, but no IPV benefits were identified in the two alcohol-focused studies. The other three studies evaluated integrated interventions, in which a focus on substance misuse was part of efforts to reduce HIV/AIDS and violence against particularly vulnerable women. In contrast to the dedicated mental health interventions, the integrated interventions did not consistently reduce mental ill health or alcohol misuse compared to control conditions.
Too few studies have been conducted to judge whether mental health treatments may provide a beneficial strategy to prevent or reduce IPV in LMIC. Key future research questions include: whether promising initial evidence on the effects of depression interventions on reducing IPV hold more broadly, the required intensity of mental health components in integrated interventions, and the identification of mechanisms of IPV that are amenable to mental health intervention.
[In: Is the future ready for youth? Youth employment policies for evolving labour markets. International Labour Office. Editors: Juan Chacaltana and Sukti Dasgupta]
(with Felix Weidenkaff)