Social Science Seminar - Meet Your Future: Experimental Evidence on the Labor Market Effects of Mentors

Can personalized mentorship by experienced workers improve young job seekers’ labor market trajectories? To answer this question, we designed and randomized “Meet Your Future”, a mentorship program which assisted a subset of 1,112 vocational students during their school-to- work transitions in urban Uganda, where youth unemployment is high. The program improved participants’ labor market outcomes. Relative to the control, mentored students were 27% more likely to work three months after graduation; after one year, they earned 18% more. Call transcripts from mentorship sessions and survey data reveal that mentorship primarily improved outcomes through information about entry level jobs and labor market dynamics, and not through job referrals, information about specific vacancies, or through building search capital. Consistent with this finding, mentored students revise downward their overly optimistic beliefs about starting wages and revise upward beliefs about the returns to experience. As a result, they lower their reservation wages and turn down fewer job offers. The results emphasizes the role of distorted beliefs among job seekers in prolonging youth unemployment and proposes a cost effective and scalable policy with an estimated internal rate of return of 300%.