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Hiring and Learning in Online Global Labor Markets

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Abstract

This paper uses data from the online employer-freelancer matching platform freelancer.com to study the determinants of a match between an employer and a freelancer. Having to rely on a relatively small number of characteristics, employers use the freelancer's country of origin and reputation scores to infer the expected service quality. I find that freelancers from developing countries are less likely to be hired when they have no individual reputation, and as individual reputation becomes better this country effect disappears. This setting also allows me to study how employers' experience in past hires affects their behavior in current hires. I show that following a good match with a freelancer, employers are more likely to hire freelancers from the good match's country. I discuss how these findings contribute to our understanding of matching, learning, and discrimination in online settings.

Suggested Citation

  • Roy Mill, 2011. "Hiring and Learning in Online Global Labor Markets," Working Papers 11-17, NET Institute, revised Oct 2011.
  • Handle: RePEc:net:wpaper:1117
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    File URL: http://www.netinst.org/Mill_11_17.pdf
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    References listed on IDEAS

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    1. Chisik, Richard, 2003. "Export industry policy and reputational comparative advantage," Journal of International Economics, Elsevier, vol. 59(2), pages 423-451, March.
    2. repec:spr:stmapp:v:14:y:2005:i:3:d:10.1007_s10260-005-0121-y is not listed on IDEAS
    3. Joseph G. Altonji & Charles R. Pierret, 2001. "Employer Learning and Statistical Discrimination," The Quarterly Journal of Economics, Oxford University Press, vol. 116(1), pages 313-350.
    4. Daniel Ellsberg, 1961. "Risk, Ambiguity, and the Savage Axioms," The Quarterly Journal of Economics, Oxford University Press, vol. 75(4), pages 643-669.
    5. John A. List, 2004. "The Nature and Extent of Discrimination in the Marketplace: Evidence from the Field," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 49-89.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Alex Wood-Doughty, 2016. "Do Employers Learn from Public, Subjective, Performance Reviews?," Working Papers 16-11, NET Institute.
    2. Ajay Agrawal & John Horton & Nicola Lacetera & Elizabeth Lyons, 2015. "Digitization and the Contract Labor Market: A Research Agenda," NBER Chapters,in: Economic Analysis of the Digital Economy, pages 219-250 National Bureau of Economic Research, Inc.
    3. 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.
    4. Kevin Yili Hong & Alex Chong Wang & Paul A. Pavlou, 2013. "How does Bid Visibility Matter in Buyer-Determined Auctions? Comparing Open and Sealed Bid Auctions in Online Labor Markets," Working Papers 13-05, NET Institute.

    More about this item

    Keywords

    International outsourcing; Online labor market; Information acquisition; Quality reputations; Country-of-origin effect; Statistical discrimination;

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • F15 - International Economics - - Trade - - - Economic Integration
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration

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