This study takes place in South Africa, and potentially Rwanda. Workseekers for the pilot study were recruited from all 9 provinces in South Africa, within a range of urban and peri-urban locations. South Africa has an exceptionally high rate of youth unemployment, with the broad unemployment rate consistently above 50% between 2018 and the first quarter of 2020. Unemployment is particularly acute among black youth and women, who are the focus of our partner, Harambee. In South Africa, as in other developing countries, the large number of unemployed youth increases the costs of screening applicants for firms, especially as many signals of skill are imprecise, and are distributed very evenly over the population of young workseekers.
Youth unemployment is a serious concern for low and middle-income countries (LMICs). Globally, youths aged 15-24 are three times less likely to be employed than their older counterparts, and the demographic structure of many developing countries means that young people represent an increasing share of the labour force. The lack of easily interpretable information about skills of workseekers is one important reason for this, as demonstrated in previous work in South Africa. Firms that are uncertain about the quality of applicants might be risk averse and offer lower wages or decide to not hire at all. This is particularly true if, once workers are employed, there are separation costs that make it difficult for firms to correct hiring mistakes. Firms often state that soft skills are particularly important for young workseekers, but these are also particularly hard to observe prior to employment. This problem is also aggravated during the COVID-19 pandemic. Lockdown and other restrictive measures will destroy existing employment relationships that cannot not be easily restored during the recovery phase. Moreover, youth are particularly vulnerable to the shocks caused by the COVID-19 pandemic as they work in less formal and permanent jobs. As with previous crises, the youth are at risk of losing critical formative work experience, with negatively effects on their employment and earning prospects for the rest of their lives (Kahn, 2010).
The evaluation examines the impact of using soft-skills to match prospective candidates to entry-level jobs. For this purpose we collaborate with large employers who source entry level employees through Harambee.
As preparation for the main trial, we began piloting work in January 2020. The pilot activities consisted of two core components. First, we developed and piloted reliable and relevant soft skill measures. Secondly, we conducted a pilot study with 155 job-opportunities of a single employer to test the experimental infrastructure. We are currently preparing the main study for which we will work with a number of corporate partners.
Measuring non-cognitive skills
The study will use measures of soft skills that capture concepts demanded by firms, have been shown to correlate with labor market success, and have good psychometric properties. As part of our pilot activities, we administered a variety of measures to more than 2000 participants. The measures were also adapted to the local context based on feedback from survey respondents and members of the Harambee team. We will analyse the data and select those which perform best for the main study.
We conducted a pilot study with 155 job-opportunities to demonstrate the viability of the envisioned research design.
We randomly selected some job-opportunities to select candidates according to a pre-existing soft skills measure (the treatment group) and some to continue using current hiring criteria (the control group). Eligible candidates with high soft skills in the treatment group received interview invitations before candidates with lower skills. In the control group, there was no such prioritization. To be eligible for these jobs, candidates had to be currently unemployed and under the age of 35. Harambee contacted almost 17,000 candidates and invited 2000 for an interview. 155 candidates were selected for the open positions. Initial results from the pilot study were successful - candidates selected in the treatment group had 26% higher soft-skills. We are now working with our corporate partner to obtain data on retention and productivity of selected candidates, and are also analysing data from the pilot to finalize the design of the main study.