Abstract
Abstract We test the role of search and matching frictions in explaining the high unemployment of tertiary-educated youth in Jordan through a randomized experiment. Firms and job candidates were provided with a job-matching service based on educational backgrounds and psychometric assessments. Although more than 1,000 matches were made, youth rejected the opportunity of an interview in 28 percent of cases, and when a job offer was received, they rejected this offer or quickly quit the job 83 percent of the time. The results suggest voluntary unemployment in this context arises from preferences over non-wage job attributes.
Highlights
In Jordan, recent university graduates face difficulties entering the labor market and firms that are seeking to fill entry-level positions complain that educated youth lack the appropriate interpersonal and technical skills required for the positions
We investigate the importance of search and matching frictions through a randomized experiment testing a labor market matching service in Amman
In previous work with female community college graduates in Jordan, we found some evidence for this channel, with the majority of those contracted with a wage subsidy receiving exactly the minimum wage and losing these jobs when the subsidy ended (Groh et al, 2013)
Summary
In Jordan, recent university graduates face difficulties entering the labor market and firms that are seeking to fill entry-level positions complain that educated youth lack the appropriate interpersonal and technical skills required for the positions. A second potential explanation is offered by search and matching theory (Mortensen and Pissarides, 1994, 1999), which explains persistent unemployment as the result of high search costs which prevent firms with vacancies from connecting with qualified job candidates.
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