Abstract:
Sri Lankan youth due to an extended period of unemployment face a lower possibility in future
employment and a reduced earning capacity. As a solution, this paper aims to identify an
efficient search method.
Emphasis is placed on social contacts, given its popularity as a search method. Social contacts
prove inefficient- leading to a 10.0% reduction in unemployment duration with a wage discount
of 7.1%. Also, social contacts create a form of stickiness that increases dependency on social
contacts and a reluctance to choose other, more efficient search methods in the future. The
popularity, inefficiency and stickiness of social contacts are speculated as the probable cause
for a large pool of youth to be unemployed over an extended period.
As an alternative to social contacts, internet job search proves to be a more efficient search
method reducing unemployment duration by 21.6% with a wage premium of 14.3%.
