"The Role of Labor Market Information on Higher Education Choices: Experimental Evidence from Peru”, with Dean Karlan and Oswaldo Molina.Abstract. In Peru, only 45% of young adults with some level of higher education find a job directly related to their educational background (Ipsos APOYO, 2009). This figure is more dramatic when analyzed by socio-economic status (SES): 71% of young adults in the highest SES have a job related to their field of study whereas only 17% of those in the lowest SES do. Such high rates of young adults not working within their fields of preparation can be partly explained by the difficulty in obtaining information about the market demand for graduates from different fields. In fact, there are no available statistics that high-school students can use when deciding what to study, leading to over allocation of students in traditional careers with poor labor market prospects. This informational gap affects the poor to a greater degree, given fewer means of gauging market information--a phenomenon that exists not only in Peru but in other developing countries (Jensen 2010, Nguyen, 2008). The Peruvian Government has acknowledged and responded to this informational gap, by evaluating the need for an informational platform that supplies key indicators of market conditions for graduates from different fields. In that sense, the objective of our project is to determine the effectiveness of improving access to information about market conditions (wages, probability of finding a related job, etc.) for different fields on steering the educational choices of young adults towards fields that are in high demand. In order to do this, we will use an experimental design to measure the effect of the informational intervention on students’ educational plans after high school graduation. Our project has approved funding from the World Bank, the Peruvian Ministry of Finance and from J-PAL, and the field work should start in 2013-2014.
"Finding Greener Grass: Job Search during and after the Great Recession", with Patrick Wightman and Sheldon Danziger.
Abstract. We use data from the Michigan Recession and Recovery Study (MRRS) to examine factors affecting job search behavior in the Detroit Metropolitan area after the Great Recession (December 2007-June 2009) and how that behavior affects job search outcomes. Unique among most labor market surveys, the MRRS asks both employed and unemployed workers if they are actively looking for work (extensive search), and the intensity of their search (measured by the number of applications the respondent sends out). These data allow us to relate measures of search behavior to characteristics such as job tenure, wages, fringe benefits and to subjective expectations of job instability. In addition, we analyze how search is associated with job mobility (both from job-to-job and from unemployment-to-re-employment). We also examine the role of reservation wages and the factors that influence the relationship between actual and desired earnings. We find that unemployed respondents receiving unemployment benefits (UI) are more likely to report looking for a job (relative to those whose UI eligibility expired, or who failed to either apply or qualify), but that they send out fewer applications than those not receiving UI. Those whose reservation wage is lower than their most recent actual wage also send out fewer applications. Among employed respondents, those who report a high likelihood of losing their current job are more likely to report looking for new employment, although this has no significant effect on the intensity of their search.