Intervention (Hidden)
In most developed countries, a large number of unemployed individuals coexist along numerous job postings for which no appropriate candidate can be found. Such jobs are typically referred to as shortage or bottleneck occupations – i.e., jobs that employers find particularly difficult to fill. In theory, skill shortages should not last in the long run as jobseekers should learn about job opportunities on the labour market and, either apply for these jobs directly, or get the appropriate training to do so. Yet, skill shortages typically do persist over time (McGrath, 2020).
One reason why this might occur could be that jobseekers are not perfectly informed about job or training opportunities in shortage occupations. In addition, they might not be aware of the advantages of following professional trainings that would allow them to enter such jobs. Following a growing body of evidence demonstrating that UI recipients face a number of information barriers when making decisions about their job search strategies (e.g., Barr and Turner, 2018; Spinnewijn, 2015; Belot, 2019; Mbih, 2020), we thus study the role of information frictions in explaining why jobseekers do not fill understaffed jobs.
Specifically, we design a low-cost informational intervention in cooperation with the Walloon (one of Belgium’s three regions) Public Employment Service that aims at reducing information frictions in order to nudge jobseekers into understaffed jobs. The randomized experiment addresses potential information frictions about the occupations that yield the greatest job finding probabilities as well as the advantages of following trainings to enter these jobs. To do so, we send information about the existence of shortage occupations to a random subset of jobseekers, as well as information about the benefits of enrolling in trainings in an understaffed occupation.
Our study builds on the nudging literature (e.g., Hoxby and Turner, 2015; Chetty and Saez, 2013) and assesses the extent to which the persistence of shortage occupations and the effectiveness of active labour market programs are influenced by information frictions. It is inspired by and adds to an emerging body of literature analysing the consequences of information provision in a variety of economic applications, including job search and labor supply (Belot et al., 2019; Altmann et al., 2018; Chetty and Saez, 2013), and education and training (Balaban and Conway, 2020; Bonilla-Mejia et al., 2019; Barr and Turner, 2018; Jensen, 2010; Hastings and Weinstein, 2008). Our experiment is particularly close to Mbih (2020), Belot et al. (2019), Altmann et al. (2018) and Barr et al. (2018) and contributes to this strand of the literature by focusing on labour market shortages specifically, and combining information about the labour market and training opportunities for the unemployed to improve the likelihood that jobseekers re-enter the labour market.