Policy recommendations

In this brief, we have summarised recent experimental evidence on improving information in labour markets. Recent evidence has shown that classic labour market interventions are less effective than assumed (McKenzie 2017) and are moreover relatively expensive (hundreds of dollars per participant). Information interventions, on the other hand, can generate large earnings gains for workers at a low cost, and can benefit firms as well.

The options for a government wanting to increase earnings or employment quality through information interventions are:

  • Skill certification and workshops to help jobseekers communicate their skillset better: simply certifying existing skills improves jobseeker earnings.
  • Encouraging applicants to provide reference letters: applicants may not think to do this, but it improves call-backs, particularly for women.
  • Mass media to spread information about vacancies to remote populations: this may be the cheapest way to do this; similar interventions have had tangible impacts on employment.
  • Job fairs to help firms and jobseekers form more realistic expectations, improving matches: while job fairs themselves do not seem to generate much additional employment, they help improve labour market functioning, such as by lowering reservation wages (above which jobseekers will accept a job offer).
  • Financial interventions (such as application incentives or transport subsidies) can also help jobseekers search and apply for vacancies in settings where labour market information is costly to access.

Policymakers should be clear about the goals they want to achieve. While few information interventions so far have shown large impacts on employment itself, they are likely to improve earnings and the quality of the employment.