Searching for Jobs in Developing Countries
Job search in most developing countries is rarely possible for the vast majority of the labor force in the modern form that it takes in developed economies. First, very few jobs are openly listed or openly competed for in the developing world. The problem is not just that employers are reluctant to list openings or that information is not available - what we can call market failures due to a lack of transparency and lack of information. It is also that job hiring is inefficient, time-consuming and unfair in most of the developing world, including involving the elite hiring of friends of friends and the more educated waiting for poor quality public sector jobs. Productivity is brought down, both by the poor match of the worker to the actual job and the time spent moving between low productivity jobs.
Limited to Non-existent Open Job Listings
There is typically no consistent information on just how few jobs are openly listed and fairly competed for in the developing world. We know it is small, even more so in countries with little formal employment. Employers will say they don’t have time to list openings, and if they do, they will get a flood of applicants outside their doors (true, for sure). Limited public listings are part of a bigger information “market failure” where it’s hard to look for jobs when you don’t know who is hiring and what fields are growing. The dimension of the information and intermediation problem in developing countries is varied, but even in countries where there is no job growth there is job rotation. This lack of an open market has fueled what is often a highly uncompetitive and even politicized culture of hiring.
Whether openly listed or not, economists often talk about formal versus informal methods of job search. Formal methods have concrete institutions attached to them - applying for an advertised opening, using a public or private employment service, or the internet. Informal methods are just that, relational and unsystematic - asking a friend, relative or work associate about jobs, stopping by a firm without knowing if there are any openings. One is not necessarily more effective than the other; in fact, most studies show multiple job search methods usually get better results faster. What matters is what method works best for a person with a particular profile, how long it takes, and whether formal or informal methods result in getting a better job. It is generally observed in developed countries that the unemployed are more likely to use formal methods (often a requirement of getting their unemployment insurance checks) while people currently working use informal methods more. But what about in developing countries?