Key message 2 – Providing information is cheap and effective.
In this section, we look at the effects and costs of various labour market interventions. We compare the information interventions described above to other classic interventions, such as skills training and cash transfers. The latter are also popular policy options (Blattman & Ralston 2015).
McKenzie’s comprehensive literature review (2017) looks at both employment outcomes and earnings, which we summarise in the online appendix.5 Here we present a summary of the costs of the interventions and their impacts on earnings.
Information interventions tend to cost about $20 per participant. They are thus much cheaper than vocational training and cash/skill transfers, which often cost several hundred dollars per participant. We present a summary of the cost of various types of interventions in Figure 1.
Information intervention can have large impacts for a small financial investment. For example, the job application workshop of Abebe et al. (2018) generated monthly earning gains of $10 per participant for a one-off investment of $18.20, after four years. Similarly, Bassi and Nansamba (2018) costs $19.10 and generated gains of $7 per month if the participant was employed. If we use the ratio of earning gains over costs, a simple measure of cost-effectiveness, we find that information interventions are among the most cost-effective policy options in labour markets (Figure 2)6.
An important caveat is that we have little direct evidence on the effects of these interventions on other jobseekers. The cost-benefit case would be weaker if these interventions caused displacement of other jobseekers.