EC966 – Assessment 2 – Essay – 2019-2020

Assessment 2: Research-informed policy note

EC966 – Labour Economics

Answers will be precise and concise (while remaining grammatically correct). The number of words for the answer is limited to 1,000 words (please include a word count).

You have been hired to advise the mayor of the capital city of a low-income developing country. The mayor’s office has received numerous complaints from managers of companies located in the city centre: they claim they struggle to find qualified employees. On the other hand, workers complain that hearing about job vacancies is costly, because most jobs are advised on boards located in the city centre, and going from the suburbs to the centre takes a while. While renovating roads or infrastructure is too expansive for the current government, one of the advisors’ team has come up with an idea: the government could subsidise the travel costs of job seekers who come from the suburbs to the city centre for a job interview.

You have been hired to write a short and balanced policy note about the possible effects, positive or negative, of the proposed policy.

When drawing theoretical predictions, you should be precise about which theoretical framework you’re referring yourselves to. You should not use any equations in this note. However, you should use formal reasoning and precise academic references (authors’ names, year, and name of the journal if ambiguous). You can use up to 10 academic references for this note, choose the most relevant ones wisely. Vague and unjustified statements will be penalised, as will elements not directly related to the question.