Labour market frictions in India: Evidence from the introduction of a job information platform

• The Indian labour market does not currently match employers and potential employees in an efficient way, leading to worse employment outcomes.
• This project provides a rigorous assessment of the value of job portals - examining their effect on job search behaviours and labour market outcomes for job seekers.
• Preliminary results suggest that job-portals can have important effects on job-search behaviour and employment outcomes for job seekers, particularly among those who face difficulty accessing the labour market using traditional means.

Despite pervasive unemployment among semi-skilled labourers and large cohorts of recent graduates from technical and vocational schools, employers in India frequently complain about the difficulty of filling vacant positions. Traditionally,informal networks have been the dominant means of job search in India. However, these networks may prevent employers from finding the best candidate for a vacancy. Job portals, which connect prospective employees with potential employers, provide a potential solution.

In partnership with a new job market information platform, this study investigated search frictions and inefficiencies among semi-skilled workers in the Indian labour market.

Our results suggest that job-portals can have important effects on job search behaviour and employment outcomes for job seekers, particularly among those who face difficulties accessing the labour market using traditional means, such as women. We found that job seekers using job portals are more likely to search for jobs in larger cities rather than their local village. Job portals also affect employment outcomes, including whether job seekers are working and the number of hours worked. These effects are stronger among women. These preliminary results suggest that job portals may be able to help overcome natural inequalities in the labour market.

Should further results support our initial analysis, we believe that job portals may prove a useful tool for increasing the rates of job acquisition among marginalised groups. New recruitment strategies could be targeted towards bringing specific marginalised groups onto the portal, and training them to use the internet and portal efficiently for their job search. Moreover, public vocational training schools can improve their placement rates by assisiting their graduates in searching for jobs through the internet and by registering on job portals.