Jobseekers’ Beliefs about ComparativeAdvantage and (Mis)Directed Search

Worker sorting into tasks and occupations based on their skills plays a potentially important role in aggregate labor productivity. This sorting may be inefficient if job-seekers have inaccurate beliefs about their skills and do not apply to jobs that match their skills. In South Africa, we assess young jobseekers' numeracy and communication skills and find jobseekers' self-perceived and measured comparative advantage persistently differ. In a field experiment, jobseekers given their skill assessment results have more accurate beliefs about their comparative advantage and redirect search toward jobs whose skill demand matches their comparative advantage in multiple search measures: an incentivized job choice task where workers choose between jobs with different skill requirements, usage data from an online job search platform, and self-reported search plans. In a larger field experiment, treatment has similar effects on self-reported measures of beliefs and search direction and substantially raises earnings and job quality, although not employment rates, after three months. These patterns are consistent with models of endogenously directed job search, where jobseekers' beliefs about their skills influence where they direct job applications and hence the wages they are offered.