Improving labour market efficiency in Ghana: A field experiment

Project Active from to Firms and Trade

The labour market in Ghana is largely characterised by informal recruitment practices. While these practices are not inherently bad, the scale at which they occur reduces the information flow and competitiveness in the recruitment process, obstructing the efficiency of the labour market in matching vacancies to more suitable candidates. According to the World Economic Forum’s Global Competitiveness Index for 2015-2016, Ghana ranks 94 out of 140 countries across the world on Labour Market Efficiency with a score of 4 of 7 and ranks at 22nd out of 31 countries among sub-Saharan Africa (SSA) countries.

Efficient labour markets can match workers with the most suitable jobs for their skill set as well as incentivise both employees and employers to act in ways that promote productivity. Thus, an efficient labour market makes it possible for workers to work as efficiently as possible and for employers to provide the right incentives. The inefficiency in Ghana’s labour market is characterised by informal and uncompetitive recruitment practices that rely heavily on personal networks.

In November 2019, the government of Ghana, through its Youth Employment Agency (YEA), established a job centre online platform to play a crucial role in coordinating and facilitating job placements. This is the first public online general job portal that is designed to provide free employment services to Ghanaian residents, especially youth who are searching for entry- to mid-career level positions.

This study aims to undertake a pilot Randomised Control Trial (RCT) to evaluate the impact of the job centre portal on labour market efficiency in Accra.