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Does standardized information in online markets disproportionately benefit job applicants from less developed countries?

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  • Agrawal, Ajay
  • Lacetera, Nicola
  • Lyons, Elizabeth

Abstract

We examine trade in services between employers from developed countries (DCs) and workers from less developed countries (LDCs) on an online platform for contract labor. We report evidence that 1) DC employers are less likely to hire LDC compared to DC workers even after controlling for a wide range of observables, 2) workers with standardized and verified work history information are more likely to be hired, and 3) information on verified work history disproportionately benefits LDC contractors. The LDC premium also applies to additional outcomes including wage bids, obtaining an interview, and being shortlisted. In addition, the evidence suggests that informational limits to trade may be addressed through a variety of market design approaches; for instance, an online monitoring tool substitutes for verified work history information.

Suggested Citation

  • Agrawal, Ajay & Lacetera, Nicola & Lyons, Elizabeth, 2016. "Does standardized information in online markets disproportionately benefit job applicants from less developed countries?," Journal of International Economics, Elsevier, vol. 103(C), pages 1-12.
  • Handle: RePEc:eee:inecon:v:103:y:2016:i:c:p:1-12
    DOI: 10.1016/j.jinteco.2016.08.003
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    References listed on IDEAS

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    Cited by:

    1. Pajarinen, Mika & Rouvinen, Petri & Claussen, Jörg & Hakanen, Jari & Kovalainen, Anne & Kretschmer, Tobias & Poutanen, Seppo & Seifried, Mareike & Seppänen, Laura, 2018. "Upworkers in Finland: Survey Results," ETLA Reports 85, The Research Institute of the Finnish Economy.
    2. John Horton, 2018. "Buyer Uncertainty about Seller Capacity: Causes, Consequences, and a Partial Solution," CESifo Working Paper Series 6985, CESifo Group Munich.
    3. Morgane Laouénan & Roland Rathelot, 2017. "Ethnic Discrimination on an Online Marketplace of Vacation Rental," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-01514713, HAL.
    4. Maier, Michael F. & Viete, Steffen & Ody, Margard, 2017. "Plattformbasierte Erwerbsarbeit: Stand der empirischen Forschung," IZA Research Reports 81, Institute for the Study of Labor (IZA).
    5. Grace Gu & Feng Zhu, 2018. "Trust and Disintermediation: Evidence from an Online Freelance Marketplace," Harvard Business School Working Papers 18-103, Harvard Business School.

    More about this item

    Keywords

    Digital markets; Trade in services; Information standardization;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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