Information Frictions and Skill Signaling in the Youth Labor Market / Sara B. Heller, Judd B. Kessler.

Format:

Book

Author/Creator:

Heller, Sara B.

Contributor:

National Bureau of Economic Research.

Kessler, Judd B.

Series:

Working Paper Series (National Bureau of Economic Research) no. w29579.

NBER working paper series no. w29579

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2021.

Summary:

This paper demonstrates that information frictions limit the labor market trajectories of young people in the U.S. We provide credible skill signals--recommendation letters based on supervisor feedback--to a random subset of 43,409 participants in New York City's summer jobs program. Letters increase employment the following year by 3 percentage points (4.5 percent). Earnings effects grow over 4 years to a cumulative $1,349 (4.9 percent). We find no evidence of increased job search or confidence; instead, the signals help employers better identify successful matches with high-productivity workers. But the additional work hampers on-time high school graduation, especially among low-achieving students.

Notes:

Print version record

December 2021.