Are Small Firms Labor Constrained? Experimental Evidence from Ghana

Morgan Hardy, Jamie McCasland

Research output: Contribution to journalArticlepeer-review


We report the results of a field experiment that randomly placed unemployed young people as apprentices with small firms in Ghana and included no cash subsidy to firms (or workers) beyond in-kind recruitment services. Treated firms experienced increases in firm size of approximately half a worker and firm profits of approximately 10 percent for each apprentice placement offered, documenting frictions to novice hiring. We interpret the program as providing a novel worker screening technology to firms, as (voluntary) worker participation included nonmonetary application costs, echoing the widespread use of an entrance fee mechanism for hiring apprentices in the existing labor market.

Original languageEnglish (US)
Pages (from-to)253-284
Number of pages32
JournalAmerican Economic Journal: Applied Economics
Issue number2
StatePublished - 2023

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)


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