Barriers to Search and Hiring in Urban Labour Markets

This section considers search frictions which may particularly affect women. In 2022, a quarter of women in low-income countries wanted to work but did not have a job, a rate nearly 50% larger than the comparable figure for men (ILO 2023). What jobs do these women want? Do they face discrimination when they apply? Do women search for opportunities differently from men? In this section, our review explores these questions and finds that, taken together, the evidence suggests large differences in women’s and men’s job search strategies and outcomes. We end by suggesting that some of these differences mean that common measures of labour underutilisation, such as the unemployment rate, may risk seriously undercounting the forgone contributions of women’s labour.

Searching for different jobs 

Female and male jobseekers may be, on average, searching for different types of jobs. Disparities in education and labour market experience might mean that women and men are qualified for, and thus searching for, different types of jobs. However, increasing evidence has highlighted that women and men, on average, may value different things in a job. While it is often useful to refer to men’s and women’s “preferences”, it’s important to note that these are likely heavily shaped by factors such as the disproportionate share of domestic work and childcare done by women and the stickiness of norms surrounding gender roles in the home. To this extent, we might expect such preference heterogeneity to be greatest where gendered norms are at their most stringent (Jayachandran 2021).

In higher-income settings, women place a higher value on flexibility (Eriksson and Kristensen 2014, Mas and Pallais 2017), shorter commutes (Le Barbanchon et al. 2021), safer work environments (Becerra and Guerra 2021), and jobs that allow them to work part-time (Wiswall and Zafar 2017). There is less work in lower-income countries that precisely measures differences in the degree to which women and men differently trade-off such job attributes against salary and security. Two important exceptions are Mahmud et al. (2021), who find that women workers in Bangladesh place a higher value on jobs that would allow them to work fewer hours, and Ho et al. (2023), who find a high premium on flexibility among women in India. Other work too suggests that women and men in lower- and middle-income countries may be searching for different jobs. For instance, Berniell et al. (2021) and Bernatzky et al. (2021) both find that upon women becoming parents, their employment becomes increasingly concentrated in the informal sector which, although lower-paid, does bring a higher degree of flexibility.

If women’s stronger preferences for various non-wage amenities and more local jobs mean that there are fewer jobs that they would be willing to accept, then the thinness of the markets that women search in may imply that they search for longer or end up with a worse match. We see evidence consistent with the idea that gendered preferences may translate into particularly high frictions and mismatch for women. For instance, Fletcher et al. (2018) show a remarkable mismatch between the types of jobs that women in India want and the jobs that working women actually have: of those working-age women who would be willing to take a job, 73% expressed a preference for “regular, part-time work” but only 10% of employed women actually worked in such a job. Presumably, this mismatch reduces the number of women accepting a paid job, leads to women accepting jobs that don’t fit their preferences, and causes women to search for longer. Consistent with this hypothesis, in Egypt, a recent intervention that provides women with children with both child-care vouchers and a matching service finds very limited take-up of both interventions. Women who have less conservative partners are more likely to apply to the jobs proposed by the matching intervention, but since these jobs do not generally meet women’s desired job attributes, the additional applications do not ultimately generate gains in employment (Caria et al. 2021).

Discrimination and employers’ gender preferences

Employers may discriminate by gender or have otherwise gendered preferences over matches. This can lead to search being differentially effective for women as compared to men. In urban Pakistan, Gentile et al. (2023) find that employers were 11.5 percentage points less likely to prefer CVs with a female name in a hypothetical CV-rating exercise and, in the same labour market, the authors found that gender differences in employment outcomes are far larger than gender gaps in indicators of search behaviour. Many employers advertising on prominent job portals in both China and India have been shown to have gendered preferences which, when conveyed either explicitly or implicitly to jobseekers, attract an applicant pool skewed towards those preferences (Chaturvedi et al. 2022, Chowdhury et al. 2018, Kuhn and Shen 2013). In India, both Chaturvedi et al. (2022) and Chowdhury et al. (2018) also find that feminine-coded jobs within the same occupation and location are lower paid.

Searching differently

Even conditional on searching for the same types of jobs, women and men may search for work differently, meaning that they experience search frictions in distinct ways. Many of the same factors that affect women’s choices about whether or not to seek paid employment at all, such as the need to schedule job search around domestic work, may also affect how women search. 

In lower-income contexts, job search is often highly structured around social networks and referrals, and a large number of “weak ties” are very useful (Calvó-Armengol and Jackson 2004, Mortensen and Vishwanath 1994). The structure of social networks may disadvantage women in the labour market: social networks are often highly segregated by gender; women often have smaller networks that are more focused on family ties; and women may face mobility and time constraints that prevent them from maintaining social connections outside of the household (Anukriti et al. 2020, Field et al. 2010, Kandpal and Baylis 2019). Network effects might interact in important ways with gendered norms: Afridi et al. (2023) (also cited in the section on job search platforms) find that providing a digital job search platform to both women and their social network had no impact on women’s work but benefitted her husband’s work, potentially because the network treatment reinforced conservative gender norms about women’s work while helping to provide information on job opportunities to men.

There is also evidence that gender differences in constructs such as risk aversion, confidence and impatience might cause differences in search strategies. Archibong et al. (2022) find that on an online job platform in Nigeria, women appear more cautious in their search behaviour, typically applying to fewer jobs, jobs that they are more qualified for, and less-senior positions than observationally similar men.[1]1. Amongst US job seekers, Cortés et al. (2023) find that women being more risk-averse and less overconfident contributes to them accepting earlier but lower-paid offers.

Are women giving up? Latent labour supply and the jobs gap

We see evidence that factors such as different preferences over job attributes or the anticipation of discrimination often lead women and men to direct their search to different labour markets, with indications that women are often overrepresented in thinner and lower-paid markets. Anticipating also the discrimination they may face in hiring decisions and the gendered constraints to the process of job search itself – such as the time demands of unpaid domestic work, mobility constraints, or limited social networks – means that many women might decide that the high costs they face to search are not worth the reward of the type of job that search may realistically bring. Such a situation, where women report wanting to work but neither have a job nor are engaging in a high degree of search activity is an important finding and it is sometimes referred to as these women being “latent” workers (Fletcher et al. 2018, Gentile et al. 2023). The large number of women trapped in this state can be seen by noting that while there are, on average, very small gender differences in unemployment rates, there are very large gender differences in the proportion of people who want a job but don’t have one, with many more women than men being in this state (ILO 2023). This comes down to the fact that to be counted as unemployed someone must have been recently searching for work and must be able to take up a job at short notice. The discrepancy suggests that the underutilisation of the talents and labour that women want to supply may be far greater than a naïve look at the unemployment statistics would suggest.

Policy take-aways 

The VoxDevLit on Female Labour Force Participation features a broader exploration of the determinants of, and potential solutions to, low levels of female labour force participation.

While it is well-understood that women may face different job-search barriers, we have very little evidence showing how job-search policies could be adapted to best meet these constraints. As mentioned before, both an intervention that combined a job-search intervention with child-care assistance and a digital job-search platform failed to improve female employment outcomes. We thus flag this as an important area to make progress.

References

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