Nudging Monsters to Help the Poor

Policy Recommendations to Catalyze Informal Sector Job Marketplaces

Abstract

Rather than building informal sector digital job exchanges themselves, governments should encourage an eco-system of exchanges by lowering costs and barriers of entry and encourage a sufficient market for competing exchanges to innovate against each other — even in smaller, poor countries.

The Value of Choice in Livelihoods

We have ample evidence that efficient markets enable buyers and seller to access goods and labor more quickly and cheaply. The same is true for informal sector job choices, with much being written by authors such as Amartya Sen who argue that the purpose of development should be to enhance freedom, with the choice of livelihood being the among the most important of human freedoms.

Work to date

Ministries of Labor around the world often have the mandate to aid job connections among the poor and employers who wish to hire them, but frankly building efficient, usable and popular marketplaces where every job seeker and employer is actively engaged in the system has been achieved by no government system. All too often, governments create regional offices where desperate job seekers register themselves with a paper photographs and fill out hand written paper sheets describing their skills, only to see these files of paper lie fallow for years, with little connection to employers and few interviews occurring. These job seeker registrations often are not digitally searchable or accessible to relevant businesses. Additionally they become out of date when job seekers move, change their mobile numbers or gain a new higher paying job or skill that make them no longer relevant for employers who did see their government registration information.

Digital Exchanges for White Collar Labor

It’s worth looking at why digital job exchanges today work well for white-collar labor but have had less success with informal sector workers.

Making private job exchanges thrive while aiding the poor: Recommendations

Given the difficulty of this problem, this paper argues that the goal of government interventions should be to encourage an ecosystem of informal market job exchanges.

Summary

Governments can help make informal job marketplaces viable businesses for private exchanges and in doing so, give millions of informal sector job seekers better livelihood choices.

Appendix: Relevant examples

SABRE and online flight ticketing — By standardizing the data APIs for plane tickets, SABRE’s standardization enabled a large ecosystem of first travel agent and later travel websites, to leverage the same data set of available flights, but compete on better service, searching and innovative algorithms to discover lower prices, such that we now have hundreds of websites like expedia.com, hipmunk.com, kayak.com and others innovating against each other.

Head, Int’l Growth at MarcoPolo.me. Founder of http://babajob.com. Dad. Believer in Tech for Good.