Transport costs in developing country cities can be un-affordable to the poor and have detrimental impacts on their mobility. The cost of searching for a job, in particular, is a likely culprit for the high unemployment rate of poor workers who are often too poor to successfully look for a job away from their place of residence. High job search costs are especially prohibitive for women who may only find lower paying-jobs, who can be constrained in their transport patterns (possibly given household chores and child care), and who are at a higher risk falling victim to harassment and crime in transport. This is especially true in South Africa given the high rate of single motherhood among the poor and given high crime in transport and around stations. Connecting vulnerable groups to jobs in South Africa is thus an objective of paramount importance, including better connecting the disabled to jobs as they face additional constraints and discrimination in the labor market.
The study will assess the cost-effectiveness of measures that can speed up and improve job matching in the greater Johannesburg area. A transport subsidy, as well as a mobile phone data plan subsidy will address cost and information inefficiencies in job search. The study will assess changes in job search behavior (method used, intensity of job search, and geographic area traveled to) and resulting improvements in labor market outcomes (speed and quality of match, job retention). The following questions will be addressed: Do treated respondents search more intensively while they are receiving treatments? Do they search in different areas, possibly further away from their place of residence? Do they apply to different job types as search costs are reduced? Do they come into contact with or find jobs more quickly, or, if unsuccessful, do they keep searching for a longer period of time? Do they update their beliefs about the status of the local labor market? Do their reservation wages and job aspirations change? Do they relocate after finding a job? Because of gender specificities in terms of labor force participation, job-search behavior, and reluctance to face insecurity in transports, the analysis will also explore the possibility of gender-differentiated impacts on the outcomes.
By focusing on the above research questions, the study will make it possible to quantitatively assess two major policy issues: (i) How detrimental is the spatial disconnection from jobs in terms of labor market outcomes of the poor? (ii) To what extent and how efficiently can policy measures be undertaken to address the issue.
The experiment will be carried out over a sample of young job-seekers applying to a job-matching program in Johannesburg but not yet selected to participate in that training. Some job-seekers will be provided with either a transport or a mobile phone data subsidy or both subsidies or will not receive any subsidy at all. The job-search behavior and unemployment outcomes of all individuals in the different groups will then be followed over a period of three months.