Tess Lallemant

Do firms know what they are looking for? A Demand-Side Experiment to Reduce Labor Market Frictions 

Abstract: Do employer-side frictions reduce match quality in the labor market for university graduates? I conduct a randomized experiment with 376 firms posting 510 job openings in Kampala, Uganda, providing an intervention to help firms identify and communicate their hiring needs when writing job descriptions. I vary whether firms use the resulting job descriptions as public job advertisements or only for internal candidate screening, separately identifying effects through better signaling versus improved evaluation criteria. Treated firms post significantly more detailed job descriptions that attract nearly 40% larger applicant pools with better skill alignment. The intervention reduces personal network-based hiring—from 8% to essentially zero—suggesting that expanded formal applicant pools provide viable alternatives to personal connections. However, these recruitment improvements do not translate into short term better employment matches. Neither wages, employer-reported skill fit, nor performance ratings improve on average. Preliminary analysis of treatment heterogeneity suggests that organizational capacity shapes outcomes. Among firms with existing HR departments, evaluation tools improve skill match quality, while firms without HR show no such gains. The results establish that firms struggle to systematically articulate hiring requirements—a meaningful friction in developing economy labor markets—but that addressing this constraint alone is insufficient without complementary hiring infrastructure.