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Increasing Employment Through the Partial Release of Information

Author

Listed:
  • Surajeet Chakravarty

    (Department of Economics, University of Exeter)

  • Todd R. Kaplan

    (Department of Economics, University of Exeter)

  • Luke Lindsay

    (Department of Economics, University of Exeter)

Abstract

We investigate whether an agency can increase employment by strategically releasing partial information about workers' skills and abilities to employers. Theoretically, we find that such an increase is possible and that there exists a range of employment levels that can be supported in equilibrium. We test this possibility using laboratory experiments with subjects as employers and agencies. We find that full information about workers leads to employer profits that are consistent with theory. Revealing coarser and not necessarily verifiable information about workers increases employment at the expense of the employers' profits but not to the highest theoretically achievable levels.

Suggested Citation

  • Surajeet Chakravarty & Todd R. Kaplan & Luke Lindsay, 2020. "Increasing Employment Through the Partial Release of Information," Discussion Papers 2001, University of Exeter, Department of Economics, revised 2021.
  • Handle: RePEc:exe:wpaper:2001
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    File URL: http://people.exeter.ac.uk/RePEc/dpapers/DP2001.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    Weather; Job placements; ratings; lab experiments; institutions; information design; unemployment;
    All these keywords.

    JEL classification:

    • C9 - Mathematical and Quantitative Methods - - Design of Experiments
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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