Urban Labour Markets Flashcards
(15 cards)
What is meant by dualism in labour markets?
Firstly, dualism between rural and urban
But then also a dualism within urban and rural.
What is meant by dualism in urban sector?
There is informal and formal urban sector
What is the relationship between GDP and urbanisation rate?
Higher GDP increases urbanisation but only to a certain point and then plateaus.
What does Lewis (1954) posit about urban labour markets?
That the surplus labour is not only tied to the rural sector. The informal urban sector also has very low productivity.
Why are there more young people in the urban labour market now?
Demographic transition and rural-urban migration.
What are some active policies that reduce youth unemployment.
- Vocational training
- Wage subsidy
- Job search assistance
- Matching / placement
What is the set up of the Abebe et al (2021)
What were the results?
What can be interpreted?§
In Addis Ababa, the area is split with blue areas which are the labourers
- Green area is where the firms are
- Red spots are where the job centres are (Three in total).
- One of the centres picked at random is given two treatments
- A subset get a reimbursement of travel costs
- Another subset get get CV application tips and an invite to do test
- Results:
The people who got the CV help and test had no effect on intensity of job searching
- The subsidy positive effect and persistent effect on job search
- In the job board positive effect on job search
Employment outcomes:
Transport and workshop treatment was significant at 1% level on formal employment
Then the workshop treatment had a statistically significant impact on permanent work
- The subsidy increased job search but had no real impact on permanent job
- While the workshop had no effect on searching but did have an impact on formal and permanent work so it may have been have reduced infromation assymetry
- In the long term (2018) the effects on finding permanent on formal work had gone. However, this could be due to the control mean increasing as over this time period there was an improvement in getting a job.
What are the policy implications for Abebe et al (2021)
- In the short term the subsidy had a positive significant effect on job search, which shows they were credit constrained.
- Because of the information asymmetry the CV workshop had a positive significant effect of a formal and permanent job. Suggests there was information asymmetry.
Overall what are the short term and long term outcomes of Abebe et al (2021)?
- In the short term the subsidy increases the search effort.
- Decreases casual employment while searching
- Increases probability of finding formal work
- In the short term the workshop:
- Does not increases search intensity
- Increases probability of finding permanent job
- Increases earnings conditional on working
- Strengthens correlation between skills and placement
Long term only workshop has long term effects
Mostly for trainees with low predictive productivity which would have been hard to signal their skills otherwise.
What is another paper similar to Abebe et al (2021) (REQUIRED)
Abebe et al (2020)
(Outcomes from employer point of view)
The same authors with a different dataset they look at the search friction of application costs.
- As in this setting the application cost is 27% of their daily wage
Empirical design:
Experimentally post a job study with:
- Application subsidy One subset
- Doubling of wage Other Subset
Findings
- Results from employers point of view
- The application subsidy was a cost but did not help signal a better candidate
- Application rate increased by 27%
- However, the people who applied for the double wage, found that these were better quality.
- Suggests high quality candidates are credit constrained.
What does Alfonsi et al (2020) try and do?
Does providing training increase the job prospect
What is the Alfonsi et al (2020) design?
Results?
- Training and matching experiment in Uganda through NGO.
- Two options of training
- Vocational training by NGO , then applying
- or getting job and then having training.
- 1714 unemployed workers being selected randomly.
- 700 offered NGO training
- The 1000 remaining did not get vocational training.
- They selected 1538 farms who were looking for individuals for their farms.
- 1714 workers at the start provided there preference
- Some were matched correctly and some not.
- 512 were control and not matched
Results:
Recorded all outcomes ITT (Intend to treat)
- Average effect of vocational training was above and was statistically significant.
- Vocational training and farm training were positive, but vocational training was more general.
- In long run vocational training is more trasferrable.
- Farm training improves initial
- Firm training improves productivity, but does not increase wage.
- This aligns with Abebe et al (2020) that the subsidy has less effect as skill certificate.
- CERTIFICATION ADDS VALUE!
- Refers again to lack of info between job searchers and employers.
ATT is different average treatment effect.
- If ATT all the prior findings are void. Only would give same results as ITT if 100% compliance.
- In reality imperfect takeup of treatment
- on vocational 67% wanted the NGO training.
- Only 66% of firms provided farm training.
- After the ATT vocational training was as important as farm training.
What is the major issue with Alfonsi et al (2020)
Major difference with ITT and ATT.
As there was not 100% compliance which overestimates the treatment.
As it actually assumes 100% got the treatment.
What are the required readings for Urban labour markets
Abebe et al (2020) job searching
Harari (2020)
What does the Harari paper do?
Harari (2020)
Does city shape impact job search in India
- Collect data on city shape in India
- 460 urban footprints
- Measure how compact cities are (average within city difference)
- Estimate economic implications of City shape
- Or has shape got nothing to do with choices?
- Impact of city shape on wages, rents as well
- Outcome can be varying different variables.
- Shape = compactness
- Responses to city shapes.
- Control for city effect and time effect how does compactness impact
- PROBLEM SHAPE IS ENDOGENOUS TO CITY OUTCOME
- Uses IV of pre-1951 city shape.
- Results:
- Compact city is an amenity (non-monetary value to living there)
- More compact cities have higher populations and rents.
- More compact cities have lower wages
- Firm side:
- No impact on firm productivity
- No impact on firm location
CITY SHAPE HAS NOTHING TO DO WITH FIRMS
Policy implications:
- Vehicles compensate bad shape.
- Public services and utilities do not seem to
CITY SHAPE WILL NOT BE NEGATIVE IF ADEQUATE POLICY
EG BOGOTA TRANSPORT HELPS TO TACKLE THE CITY SHAPE
