Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267458 
Year of Publication: 
2022
Series/Report no.: 
IZA Discussion Papers No. 15721
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
Many developing countries exhibit a puzzling pattern given their scarce human capital: unemployment rates increase with education. We develop and estimate a model where educated unemployment arises from heterogeneous workers participating in a frictional labour market with three sectors (public, private and self-employment). We estimate that public sector distortions explain around two-thirds of educated unemployment in urban Burkina Faso and one-quarter in Senegal. We then simulate three equally costly policies. In contrast with public job creation and subsidies to self-employment income, subsidies for private sector vacancy creation effectively reduce educated unemployment and improve aggregate workers' welfare.
Subjects: 
unemployment
education
search and matching model
urban West Africa
JEL: 
J24
J64
E24
Document Type: 
Working Paper

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