Working Paper: CEPR ID: DP16546
Authors: Vittorio Bassi; Aisha Nansamba
Abstract: We study how employers and job-seekers respond to credible information on skills that are difficult to observe, and how this affects matching in the labor market. We experimentally vary whether certificates on workers' non-cognitive skills are disclosed to both sides of the market during job interviews between young workers and small firms in Uganda. The certificates cause workers to increase their labor market expectations, while high-ability managers revise their assessments of the workers' skills upwards. The reaction in terms of beliefs leads to an increase in positive assortative matching and to higher earnings for workers, conditional on employment.
Keywords: noncognitive skills; labor market; Uganda
JEL Codes: J24; M51; O12
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| disclosure of certificates (G24) | upward revision of managers' beliefs about workers' skills (J24) |
| disclosure of certificates (G24) | increased labor market expectations of workers (J29) |
| disclosure of certificates (G24) | positive assortative matching and higher earnings for workers (J31) |
| certificates (Q48) | strengthened correlation between workers' actual skills and managers' perceptions (J24) |
| certificates (Q48) | changes in behavior of treated workers (J29) |