Home Bias in Global Employment

49 Pages Posted: 10 Oct 2017  

Chen Liang

Arizona State University (ASU), W.P. Carey School of Business, Department of Information Systems, Students

Yili Hong

Arizona State University (ASU) - W.P. Carey School of Business

Bin Gu

Arizona State University (ASU) - Department of Information Systems

Date Written: September 30, 2017

Abstract

We study the nature of home bias in online employment, wherein the employers prefer workers from their own home countries. Using a unique large-scale dataset from a major online labor platform, we identify employers’ home bias in their online employment decisions. Moreover, we find that employers from countries with high traditional values, lower diversity, and smaller (user) population size, tend to have a stronger home bias. Further, we investigate the nature of employers’ home bias using a quasi-natural experiment wherein the platform introduces a monitoring system to facilitate employers to keep track of workers’ progress in time-based projects. After matching comparable fixed-price projects as a control group using propensity score matching, our difference-in-difference estimations show that the home bias does exist in online employment, and at least 40.93% of home bias is driven by statistical discrimination.

Keywords: home bias, employment, statistical discrimination, taste-based discrimination, quasi- natural experiment, Gig economy

Suggested Citation

Liang, Chen and Hong, Yili and Gu, Bin, Home Bias in Global Employment (September 30, 2017). NET Institute Working Paper No. 17-06. Available at SSRN: https://ssrn.com/abstract=3049357 or http://dx.doi.org/10.2139/ssrn.3049357

Chen Liang (Contact Author)

Arizona State University (ASU), W.P. Carey School of Business, Department of Information Systems, Students ( email )

Tempe, AZ
United States

Yili Hong

Arizona State University (ASU) - W.P. Carey School of Business ( email )

Tempe, AZ 85287-3706
United States

HOME PAGE: http://yilihong.github.io/

Bin Gu

Arizona State University (ASU) - Department of Information Systems ( email )

Tempe, AZ
United States

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