Working Paper: NBER ID: w29588
Authors: Samuel Bazzi; Lisa Cameron; Simone G. Schaner; Firman Witoelar
Abstract: Job seekers face substantial information frictions, especially in international labor markets where intermediaries match prospective migrants with overseas employers. We conducted a randomized trial in Indonesia to explore how information about intermediary quality shapes migration outcomes. Holding access to information about the return to choosing a high-quality intermediary constant, intermediary-specific quality disclosure reduces the migration rate, cutting use of low-quality providers. Workers who do migrate receive better pre-departure preparation and have improved experiences abroad, despite no change in occupation or destination. These results are not driven by changes in beliefs about average provider quality or the return to migration. Nor does selection explain improved outcomes for those who migrate with quality disclosure. Together, our findings are consistent with an increase in the option value of search: with better ability to differentiate offer quality, workers search longer, select higher-quality intermediaries, and ultimately have better migration experiences.
Keywords: information frictions; international migration; intermediaries; randomized trial
JEL Codes: D83; F22; L15; O15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Intermediary-specific quality disclosure (L15) | Migration rate (F22) |
| Intermediary-specific quality disclosure (L15) | Predeparture preparation (Y20) |
| Intermediary-specific quality disclosure (L15) | Improved experiences abroad (Z38) |