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Abstract:

Journal article
Landing the first job: The value of intermediaries in online hiring

April 2016
Paper No' :


Tags: incomplete information; labour market intermediation; offshoring

Online markets for remote labour services allow workers and firms to contract with each other directly. Despite this, intermediaries-called outsourcing agencies-have emerged in these markets. This article shows that agencies signal to employers that inexperienced workers are high quality. Workers affiliated with an agency have substantially higher job-finding probabilities and wages at the beginning of their careers compared to similar workers without an agency affiliation. This advantage declines after highquality non-affiliated workers receive good public feedback scores. The results indicate that intermediaries have arisen endogenously to permit a more efficient allocation of workers to jobs. © The Author 2015.