Does Information Help or Hinder Job Applicants from Less Developed Countries in Online Markets?

43 Pages Posted: 18 Jan 2013 Last revised: 16 Oct 2014

See all articles by Ajay Agrawal

Ajay Agrawal

University of Toronto - Rotman School of Management; National Bureau of Economic Research (NBER)

Nicola Lacetera

University of Toronto - Strategic Management; University of Toronto at Mississauga - Department of Management; National Bureau of Economic Research (NBER)

Elizabeth Lyons

University of California, San Diego (UCSD)

Date Written: January 2013

Abstract

Online markets reduce certain transaction costs related to global outsourcing. We focus on the role of verified work experience information in affecting online hiring decisions. Prior research shows that additional information about job applicants may disproportionately help or hinder disadvantaged populations. Using data from a major online contract labor platform, we find that contractors from less developed countries (LDCs) are disadvantaged relative to those from developed countries (DCs) in terms of their likelihood of being hired. However, we also find that although verified experience information increases the likelihood of being hired for all applicants, this effect is disproportionately large for LDC contractors. The LDC experience premium applies to other outcomes as well (wage bids, obtaining an interview, being shortlisted). Moreover, it is stronger for experienced employers, suggesting that learning is required to interpret this information. Finally, other platform tools (e.g., monitoring) partially substitute for the LDC experience premium; this provides additional support for the interpretation that the effect is due to information about experience rather than skills acquired from experience. We discuss implications for the geography of production and public policy.

Suggested Citation

Agrawal, Ajay and Lacetera, Nicola and Lyons, Elizabeth, Does Information Help or Hinder Job Applicants from Less Developed Countries in Online Markets? (January 2013). NBER Working Paper No. w18720. Available at SSRN: https://ssrn.com/abstract=2202657

Ajay Agrawal (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Nicola Lacetera

University of Toronto - Strategic Management ( email )

Canada

University of Toronto at Mississauga - Department of Management

Canada

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Elizabeth Lyons

University of California, San Diego (UCSD) ( email )

9500 Gilman Drive
Mail Code 0502
La Jolla, CA 92093-0112
United States

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