The origins of distorted beliefs: Implications for unemployment and labour market interventions

Distorted beliefs in job search are a barrier to increased formalisation of the economy. Understanding such biases can help design interventions to make the labour market more efficient, inclusive, and effective. This project will measure job-seekers’ beliefs about their prospects in the labour market.

Recent interventions show workers have biased beliefs about their job prospects. Over the course of the interventions, jobseekers learned chances of getting a job were low, wages were low, and commuting costs were high, leaving them discouraged. This effect has undermined the studied policies and merits more detailed analysis.

Through a survey of users of a new text message-based job search service developed by the Ghanaian government and to-be-released data from the recent census, this project will measure how job seekers form beliefs about those prospects.

In addition to expected wages, occupation, and commute times, this research will investigate workers’ beliefs about job-related hazards, hours worked, long-term prospects for promotion, and fall-back options. Where existing research takes beliefs as given, this project places direct emphasis on the source of beliefs and how biases are maintained, and will gather information from jobseekers on role models, job search behaviour, advertising, and social ties.