The Selection of Talent: Experimental and Structural Evidence from Ethiopia

We study how search frictions in the labor market affect firms’ ability to recruit talented workers. In a field experiment Ethiopia, we show that an employer can attract more applicants by offering small monetary incentive for making job application. Estimates from structural model suggest intervention is effective because cost of application large, and positively correlated with jobseeker ability. provide evidence this positive correlation driven dynamic selection. second experiment, local recruiters underestimate impacts incentives. (JEL J23, J24, J31, J64, O15)