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Abstract for:

Location, Search Costs and Youth Unemployment: Experimental Evidence from Transport Subsidies in Addis Ababa

Simon  Franklin,  May 2016
Paper No' SERCDP0199: | Full paper (pdf)
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Keywords: job search, spatial mismatch, unemployment, cash constraints, urban, transpor

JEL Classification: J64; C93; J61; O18

Is hard copy/paper copy available? YES - Paper Copy Still In Print.
This Paper is published under the following series: SERC Discussion Papers
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Do high search costs affect the labour market outcomes of job seekers living far away from jobs? I randomly assign transport subsidies to unemployed youth in urban Ethiopia. Treated respondents increase job search intensity, and are more likely to find good employment. Subsidies also reduce participation in temporary work during job search. I explain these results with a dynamic model of job search, in which cash constraints cause workers to give up search too early. The predictions of the model closely match the trajectory of treatment effects over time, which I estimate using a weekly phone call survey.