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

Online markets for remote labor services allow workers and firms to contract with each other directly. Despite this, intermediaries - called outsourcing agencies - have emerged in these markets. This paper 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 high-quality 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.

Stanton, C. and Thomas, C. (2014), Landing the first job: The value of intermediaries in online hiring, Discussion Paper No. 1316, Centre for Economic Performance: London School of Economics and Political Science.

Metadata

  • Research publication
  • Other
  • Yes
  • no specific sector focus
  • rating, skills and employability
  • English
  • London School of Economics and Political Science (Research institute)
  • Qualitative research
  • 2014
  • Subscription
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