impact of the job fairs on the firms by randomly providing invitations to some of the firms.

While a literature from developing countries suggests that job-placement services have large short-run effects on employment outcomes (Card et al., 2010), other work has shown that these effects could be displacing other workers (Cr ́epon et al., 2013).<sup>5</sup> A key research question is whether improved matching through any interventions of this kind can improve firms’ ability to hire good workers; whether this is possible or not has important implications for whether such interventions can have an impact on the total number of jobs available, or whether the positive effects of all such programs are likely to be displaced elsewhere.<sup>6</sup> We contribute to a literature on how biased beliefs can lead to sub-optimal job search and employment decisions (Spinnewijn, 2015). DellaVigna et al. (2016) and Krueger and Mueller (2016) show that recent income levels can cause the unemployed to anchor their reservation wages at levels that are too high. Our results suggest that the unemployed set their reservation wages too high because of unrealistic expectations of wages in big formal firms, which seems to stem specifically from a lack of contact with those firms.<sup>7</sup> Our results are the first evidence, to our knowledge, that formal employment rates can be increased through interventions that bring reservation wages down to more realistic levels.<sup>8</sup> There is almost no experimental work focussing on firm recruitment.<sup>9</sup> While a growing literature uses field experiments with firms to test for binding constraints to growth faced by those firms (Bandiera et al., 2011), relatively little attention has been paid to how firms may be constrained by their inability to find the right workers to hire.<sup>10</sup> A large literature looks at how firm human resource management can improve firm performance Bloom and Van Reenen (2011). In a developing country context (Bloom et al., 2010) show that improved human resource management practices, which include, for instance, performance-based incentive systems for workers, can improve firm productivity. There is relatively little work on

- 5 Other studies looking at the partial equilibrium effects of job search assistance programs include Altmann et al. (2015), Dammert et al. (2015), and Graversen and Van Ours (2008).

- 6 Hardy and McCasland (2015) show that very small firms seem to be labour constrained: the introduction of improved screening mechanisms improves revenues and profits. A long literature suggests that job referrals can be used by information constrained firms to learn about work ability; see for example, Pallais and Sands (2016) and Heath (2016).

> 7 By constrast, evidence from South Africa suggests that reservation wages are not out line of available wages, and thus are not a contributor to the unemployment problem (Nattrass and Walker, 2005).

- 8 Groh et al. (2015) suggest that young people choose unemployment due to preferences over non-wage benefits. By contrast, workers in our sample do not reject offers to remain unemployed. They seem to increase their search effort, and indeed find jobs shortly after the fairs in other positions.

- 9 One notable exception is Hoffman et al. (2015), who show that firms can improve the quality of workers hired by limiting managerial discretion in hiring and relying more directly in standardized test results. In another experiment related to ours Hardy and McCasland (2015) study the use of an apprentice placement system, which they argue can be used as a novel screening mechanisms for firms.

- 10 Work on audit studies (Bertrand and Mullainathan, 2004) suggest that firms face time constraints that in some cases lead them to make sub-optimal hiring decisions based on statistical discrimination.

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