UC Berkeley

This dissertation examines economic challenges faced by three marginalized groups in Middle Eastern labor markets — women, young adults, and refugees — and evaluates policies that expand access and promote economic empowerment. Chapter 1 examines how adverse selection on job amenities like transportation prevents firms from offering jobs which would increase women’s labor market access, and evaluates different policies to solve this market failure. Chapter 2 examines the long run impacts of entering the labor market during a recession on young adult’s labor market and marriage outcomes in Egypt. Chapter 3 evaluates a rental subsidy for Syrian refugees in Jordan and its impact on labor market participation, child welfare, and social integration.The first chapter, titled “Job Amenities, Adverse Selection, and Women’s Labor Supply in Jordan,” examines how adverse selection on job amenities impacts women’s labor market access in Jordan. In many settings, women face logistical barriers to working, such as transportation and childcare. Firms could bridge these gaps by offering job amenities like firm-provided transportation, yet these amenities remain rare in developing countries. This paper asks whether adverse selection can help explain why. When workers’ willingness to pay (WTP) for job amenities is negatively correlated with unobserved productivity, offering amenities instead of higher wages can disproportionately attract less productive workers. This dynamic may lead firms to avoid providing amenities even when WTP exceeds cost. This issue is particularly relevantin Jordan, where female employment is low and logistical barriers to work are significant. Working with a Jordanian research firm that exclusively hires female survey enumerators, I combine administrative firm records on worker productivity with a survey eliciting individual level WTP for job amenities such as childcare, transportation, and preferred pay schemes. For all amenities except childcare, the least productive workers have the highest willingness to pay. This negative correlation is particularly large for transportation, and cannot be fully explained by income, location, commuting costs, or any other observable. To assess the empirical magnitude of this adverse selection, I estimate a monopsony model that allows job amenities to increase labor supply and attract workers with different unobserved productivities. Estimates of the model demonstrate that mandating firm-provided transportation while allowing wages to adjust downward would increase employment, due to workers’ large WTP for the amenity, but would lower average worker productivity via negative selection. The net effect is a reduction in firm profit, which may explain why the firm does not offer transportation. However, allowing workers to sort between a contract offering a higher wage without transportation and one offering a lower wage with transportation could simultaneously solve the adverse selection problem and increase worker welfare.The second chapter, titled “Economic and Social Impacts of Entering the Labor Market During a Recession: Evidence from Egypt,” examines labor market scarring among Egyptian youth. Relatively little is known about the effects of entering the labor market during a recession for young people in developing countries. Using novel, newly digitized historical unemployment rates from Egypt stretching back to 1968, I estimate the long run labor and marriage market effects of entering the labor market during a period of high unemployment. I find effects which reflect the same kind of economic scarring found in high income countries, but which manifest differently in this setting due to the differences in the job ladder. Men experience reductions in employment for 2 years after entry, but the long run effect on employment is positive. This unexpected increase is mostly driven by an increase in self-employment without any employees, often a form of disguised unemployment. Male recession entrants are also less likely to ever have a formal wage work job, an effect which is strongest for college graduates. In terms of family formation, both men and women turning 18 during a recession experience delays in entering marriage. However, there is some suggestive evidence that this benefits women: female recession entrants are more likely to complete secondary education and experience increased decision-making in their marriages.The third chapter, titled “Housing Subsidies for Refugees: Experimental Evidence on Life Outcomes and Social Integration in Jordan” and coauthored with Abdulrazzak Tamim, Emma Smith, Edward Miguel, Samuel Leone, Sandra V. Rozo and Sarah Stillman, evaluates the impact of a rental subsidy for Syrian refugees in Jordan. Refugees require assistance for basic needs like housing but local host communities may feel excluded from that assistance, potentially affecting community relations. This study experimentally evaluates the effect of a housing assistance program for Syrian refugees in Jordan on both the recipients and their neighbors. The program offered full rental subsidies and landlord incentives for housing improvements, but saw only moderate uptake, in part due to landlord reluctance. The program improved short-run housing quality and lowered housing expenditures, but did not yield sustained economic benefits, partly due to redistribution of aid. The program unexpectedly led to a deterioration in child socio-emotional well-being, and also strained relations between Jordanian neighbors and refugees. In all, housing subsidies had limited measurable benefits for refugee well-being while worsening social cohesion, highlighting the possible need for alternative forms of aid.